Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Did the parent company's stock show a big drop in price - reflecting the spin off - on the 14th or the 28th?

From the closing price on the 13th to the open on the 14th, it dropped about 2%. From closing price to closing price, it dropped 3.7%. Meanwhile the new security eventually hit the market at about 7.2% of the parent company's price (and it was a 1:1 distribution). So the parent company's stock dropped by something like 30-50% the market price of the new stock on the 14th. It didn't really move on the 28th, which is when the new stock started trading.

If it happened earlier, presumably on the 14th, then I'd be tempted to say you need to come up with a value on that date.

What would I do in this case? The only thing I can think of is to take the first available market price, which was on the 28th. For stocks that don't trade every day, you can interpolate or take an average. But in this case there is no prior trading history.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.