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StockCentral :: Community
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Join in on the discussion with other like-minded investors in our community forums. Learn about the fundamental investing methodology and participate in educational workshops in the Investing forums, stay up-to-date on StockCentral news and make suggestions to the StockCentral team in Central Square, and discuss your favorite stock or recent market news in our A-Z ticker-based forums.
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Lawrence Moreno
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| 01/11/2007 8:27 PM |
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| I own Duke Energy (DUK). They just had a spinoff of Spectra Energy (SE). I received 1 share of SE for every 2 shares of DUK. It seems logical but I want to know for sure, do I take my cost basis from DUK and now make 1/3 of that the cost basis for SE and 2/3 the cost basis for DUK? |
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Danny Matthews
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| 01/12/2007 8:41 PM |
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| Do you use NOCA or CA3? I believe they have a spinoff function that does the math, just plug in the 1 for every 2 shares |
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Danny Matthews
Tuscola IL |
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Lawrence Moreno
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| 01/12/2007 9:37 PM |
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| Thanks Dan, I'm still at the novice level and only own Classic Plus as software. I track all my own purchase/sales totals in Excel spreadsheets I've created. I do have another question about DUK though and I notice they don't have a message board. I was curious why not. In 2006 the stock had really been improving and saw the price go from around 27 to over 34 in December. Is anyone out there following DUK? I was gettting very happy with it and now I get Spectra. For now I'll still hold on to DUK and see if they can start growing again and we'll see what Spectra brings. |
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Joe Craig
Ellicott City, MD
StockCentral Administrator
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| 01/12/2007 10:08 PM |
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> I notice they don't have a message board. I was curious why not.
I'll be happy to create a DUK forum. Give me until tomorrow and it should be ready! |
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Joe |
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rip west
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| 01/12/2007 10:46 PM |
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No, that's not the way it works. Per information on the company website, 58.11% of the original cost basis stays with DUK. Spectra gets the remainder [you'll have to do some math, you know  ] It may seem logical to take 1/3 of the basis when you have 1 share spun off for every 2 you owned, but you have to take the relative market values into consideration. Roughly, they take the market price of DUK times 2 and the market price of SE times 1, total them, and then take the percentage of the total amount you got for Duk to that total to get the 58.11%.
There are different, acceptable methods for using the market price. Some use opening, some Closing, and some take an avererage. The 58.11% that I gave you will stand up for tax purposes.
Now might be a good time to ask what you want to use this for. I gave you what you would need for taxes. Figuring return on investment is another thing entirely. For DUK, I would consider the shares of SE received times the opening market, as a distribution in their return. For SE, I would take the beginning market value for my beginning figure.
If that doesn't significantly muddy it up for you, come on back with any questions.
Rip West |
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Robert Young
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| 01/25/2007 7:43 AM |
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Rip,
Do you possibly know the cost basis for Mirant. Thanks
RYoung4457@aol.com |
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Robert Young
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| 01/25/2007 7:43 AM |
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Rip,
Do you possibly know the cost basis for Mirant. Thanks
RYoung4457@aol.com |
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rip west
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| 01/25/2007 9:08 AM |
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If you are talking about the original spinoff of Mirant from Southern as of 3/21/01, 38.91% of Southern's basis went to Mirant, and 61.09% remained with Southern.
Rip West
Saint Paul, MN
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Lewis Adrian
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| 01/25/2007 3:26 PM |
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You have the right idea but the wrong fractions. Got to the
Spectra energy website. on their Investor relations page you will see a
link about the spinoff from Duke. It explains what fractions to use to
reduce your cost basis in Duke and establish the basis in the new
Spectra stock.. I have had several of this type of spinoff and the
company always provides the fractions to use for determining the
adjusted cost basis for the old and new shares.
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