Hi all, what’s the best way to deal with the recent BAM stock split? Brookfield Corporation had a four-for-one stock split, where investors received one share of its asset management business, Brookfield Asset Management, for every four shares they currently own.
So my original entry for BAM earlier in the year was 116 shares and now I have 116 of Brookfield Corp and 29 of BAM.
Do a search for
stock split .
This isn’t a typical stock split though since there’s now two separate companies that I hold shares in?
Try Acknowledging free shares - #4 by Harry_Hirsch which suggests valuing the new security, issuing it as a dividend by the original security, then using the dividend to buy the new securities ensuring nothing is left over.
Hi everyone, and in particular @stewie , @flywire and (… sorry to chirlu, but as a new member I can only mention 2 users), but also to anyone who has run into this issue!
The main problem I find myself with is that the old BAM ISIN was CA1125851040, which is different from both the new BAM (ISIN CA1130041058) and BN (old BAM: new ISIN CA11271J1075).
So if I had 100 shares of the old BAM (ISIN CA1125851040), now I have 100 shares of BN (ISIN CA11271J1075) and 25 shares of the new BAM (ISIN CA1130041058).
Has anyone found a way to change the ISIN of the old BAM for that of BN without having to rewrite the entire history of movements (in my case 20 purchases)?
I am a new user here with PP, but I had the same issue. It is a spinoff of a new company. I recognized the value of the new shares as a dividend and then set up the new company with the same cost basis as a dividend for future tax purposes. The holding period fo r the new shares relates back to the original purchase date of the original company.
Sorry to bump this but I still haven’t recorded this transaction and don’t quite follow the above. Could someone explain to me in layman’s terms exactly what I need to do? My position in 2022 was 116 shares of Brookfield Asset Management. Now when I look at my positions in Degiro I have 116 of Brookfield Corp and 29 of Brookfield Asset Management.
Thanks in advance.
Hi Rafa, thanks but was hoping to generate some new replies since my last post as I still don’t know how to account for this.
Well, the message is stii the same. Stock split of 4 to 1 and transfer the new 29 shares to the new BAM security.
Thanks Laura for pointing this out
Thanks, @Rafa. I’m clearly doing something wrong when I enter it into PP. Would you mind posting an idiot proof guide for the steps to take?
My situation is:
- Purchased 116 shares of BAM (five separate purchases over a couple of years)
- Sold 116 shares of BAM @ 43.15 USD for 4,851.23 EUR
- Purchased 116 shares of BN @ 43.15 USD for 4,851.23 EUR
- Purchased 29 shares of BAM @ 0.00 USD
Whatever I’ve tried doesn’t seem to tie back to what I’m seeing in Degiro. I’ve translated some of the German posts so maybe something is lost in translation…
Appreciate any help here, thanks.
So I read that you should book the proceeds as a dividend, which I’ve done so here. But where do I go from here? One comment mentions to invest a dividend equal to the opening price of the new share and buy it. How exactly do I record this?
@Laura mentioned to purchase the corresponding number of allocated shares from the booked amount. This doesn’t make sense to me though as obviously after step 1 I still have 116 shares of BAM. My end position needs to be 116 shares of BN and 29 shares of BAM.
You buy these shares. This means that you make a corresponding purchase entry.
That will be the case then.
I appreciate I may be coming across as obtuse here but bear with me. So I’ve made the corresponding purchase entry of 116 shares of BN totalling 4,851.23. I’m obviously still left with the 116 shares of BAM. How do I account for the latter and be left with 29 shares of BAM? I don’t see how the dividend transaction I posted earlier impacts what I see here.
My problem is that I have no knowledge of the details of the spin-off.
Please describe the spin-off process.
- Number of your shares on the day of the spin-off
- Number of new shares allotted
- Price of the new shares on the day of the spin-off
I’m not sure I understood that.
The value of your Dividend is therefore calculated as follows:
- (116 x Share price BN) + (29 x Share price BAM) = Value of Dividend
You book the calculated amount as a dividend. Then you buy for this amount 116 shares of BN and 29 shares of BAM.
I don’t understand the connection with the spin-off.
I´m not sure if we get to the point in PP that you see the exact figures of Degiro, but maybe I can shed some light on the matter in general terms.
Starting Point: You had 116 shares of BAM in December 2022
1.) BAM renamed in BN → You now have 116 shares of BN
2.) BN distributed 25% of it´s business to (new) BAM → you received fair share → 29 shares
You stated that you haven´t paid for the shares of new BAM and that is correct to the point that you haven´t paid money. But you have paid in a form with value, because your 116 shares of BN should have been (in a idealistic world) 25% less valuable from this exact point on, because 25% of the assets were distributed to another company.
Possible Solution: You book a dividend in BN in the amount of the figure you would have paid for the acquisition of the new BAM shares. If I looked it up correctly the BAM shares were at 32,00USD on Dec. 12 2022. So the dividend would be 928,00USD. With this 928,00USD you “buy” the 29 shares of new BAM with 32,00USD each.