Conversion of SPAC to another Stock

Nick0131

1 Share of Longview Acquisition was converted to 1 share of Butterfly Network. Quicken "removed" the shares of Longview at cost. The Butterfly shares were 'added' with no cost. If I edit the transaction and add a cost, there will be a reduction in cash, which is incorrect. Is there a better way to handle this. Given the number of SPACS these days it will happen more frequently than in the past. Thanks

q_lurker

Three options
1.  Manual Remove Shares / Add Shares. The Add gets the original cost and acquisition date. Unlikely a download included that info. Good option for a single lot. 

2.  Corporate Name Change. Can also be done manually by editing the name of the Longview security.  May need to manually change the ticker. Makes ALL Longview transactions read as Butterfly transactions. 

3.  Corporate Acquisition. Better choice for multiple lot holding. 

Corporate Spinoff could work and might apply if Longview continues to exist. If it does not continue, you would need a transaction to dispose of it. 

Tom Young

Having the cash amount show up as a dollar amount under the "Cash Amt" column and the "Inv Amt" with the cash balance left unchanged is normal behavior:

Ultimately the accounting is correct.  The original investment made sometime in the past decreased the cash back at the time of purchase.  Then you "magically" took that original investment off your books and "magically" added a different investment - with the same basis and holding period as the original investment.  And although Quicken shows "cash" associated with that second transaction the final bit of "magic" is that cash is unaffected.  All's good.

You don't get the ability to post pictures until you've made "X" number of posts, whatever "X" is.

q_lurker

One thing I take from your picture - multiple lots.
I don't know the rules on SPACs.  Generally I would expect the cost basis and acquisition dates of your three original purchases to transfer to your new holding.  If that is the case, you really need three Add Shares to reflect the three individual lots.  

Again, I am not surprised your FI did not send the information that way.  Most do not.  But in their accounting, you may find they show it that way - as three separate lots.  That is where the Corporate Acquisition behaves better.  It would yield three Add Shares transactions reflecting the cost and dates for your original three lots.

It is not a big deal for you to add to and edit what you have to get the three Add Shares correctly.  You have a good handle on all the information.  When users have had multiple years of dividend reinvestment plans, it can get really cumbersome. 

The information provided in the display does not add-up to me. However, the transaction report makes perfect sense.  

Perhaps the obfuscation is that Amount Invested in a Portfolio View (your "main Page" reference, I suspect?) is not the same parameter as the Amount Invested column on the Transactions report.  I rarely find Amount Invested meaningful in either place. 

NotACPA

What happens if you delete that Removed transaction ... and instead manually input a Corporate Acquisition transaction?

Tom Young

It seems like another way of fixing this would be to simply edit the ADD transaction and enter the cost and acquisition date.

Nick0131

NotACPA & Tom: Thanks for your input! I realize now I did not spend enough time to see what had me confused and gave you a wrong scenario. So here goes: The 'add shares' process in fact does not change the cash balance and therefore "works". Problem is there is an entry to the "cash Amt" column, even though cash is not affected:

Share Bal Inv. Amt Cash Amt Cash Bal
Orig Bal 1,000
New Add 50 500 500 1,000

In the above, there should not be an entry in the 'Cash Amt' Column, which is in essence your cash activity column. It should be blank. The problem occurs if you attempt to do any work with the Cash Amt column via Excel or otherwise.
I am new to the program (2 months) Anyway, that's my take on it. Thanks, Nick

Nick0131

My formatting in the above did not work as intended. If you look at an inv activity screen I think you will see what I am getting at. I could send a picture but i do not see as an option. Nick

Nick0131

It is all of 5 minutes later an just above the corporate acquisition action there is a corporate spinoff action. I will try both tomorrow and let you know what i think. I do still think the add shares issue I have noted may be something that needs to be fixed. Thanks

q_lurker

Three options
1.  Manual Remove Shares / Add Shares. The Add gets the original cost and acquisition date. Unlikely a download included that info. Good option for a single lot. 

2.  Corporate Name Change. Can also be done manually by editing the name of the Longview security.  May need to manually change the ticker. Makes ALL Longview transactions read as Butterfly transactions. 

3.  Corporate Acquisition. Better choice for multiple lot holding. 

Corporate Spinoff could work and might apply if Longview continues to exist. If it does not continue, you would need a transaction to dispose of it. 

Nick0131

Q-Lurker: Option 1 is how Quicken handled it: Removed Longview, added Butterfly. The remove transaction is perfect: zero out shares and reduce investment by $9000. Nothing in cash amount column and cash balance unchanged.

The add transaction resulted in 500 shares of Butterfly, but no cost, no change in cash. I added the cost ($9,000). The transaction shows up as +$9,000 in the investment column, which is correct. However, +$9,000 also ends up in the cash amount column, which is incorrect. The cash balance remains unchanged.

It is my thought the add function does not work properly. If someone would show me how to add a png or similar file to a comment it will be easier to see.

Thanks

Nick0131

Q_Lurker: I found help on posting an image:

https://community.quicken.com/discussion/7867159/faq-how-do-i-post-a-screenshot-in-the-community-from-windows

The post indicates using editing tools , which makes sense. However, I do not have any editing tools in my comments box?

Tom Young

Having the cash amount show up as a dollar amount under the "Cash Amt" column and the "Inv Amt" with the cash balance left unchanged is normal behavior:

Ultimately the accounting is correct.  The original investment made sometime in the past decreased the cash back at the time of purchase.  Then you "magically" took that original investment off your books and "magically" added a different investment - with the same basis and holding period as the original investment.  And although Quicken shows "cash" associated with that second transaction the final bit of "magic" is that cash is unaffected.  All's good.

You don't get the ability to post pictures until you've made "X" number of posts, whatever "X" is.

Nick0131

Hey Tom,

Well, I pulled the full transaction record for the two stocks and at the end of the day they balance, as you indicated. I do not understand why the transaction inquiry does not show all of the entries that appear in the transaction report, but I am ok with that.

Thanks for your help! Your super user status was on full display here.

Nick

q_lurker

Nick0131 said:

Q-Lurker: Option 1 is how Quicken handled it: Removed Longview, added Butterfly. The remove transaction is perfect: zero out shares and reduce investment by $9000. Nothing in cash amount column and cash balance unchanged.

The add transaction resulted in 500 shares of Butterfly, but no cost, no change in cash. I added the cost ($9,000). The transaction shows up as +$9,000 in the investment column, which is correct. However, +$9,000 also ends up in the cash amount column, which is incorrect. The cash balance remains unchanged.

It is my thought the add function does not work properly. If someone would show me how to add a png or similar file to a comment it will be easier to see.

Thanks

Not to be argumentative, but I beg to differ.  What you started with was how "your financial institution" handled it.  Quicken just takes what it is given.  The FI did not provide the full information for the Add Shares transaction.  They did not report the cost basis or acquisition date applicable for the added shares.  That is not uncommon; most do not provide that information, which is why the broader recommendation is to not rely on their downloads for such events.

As Tom has indicated, after you filled in the missing data, the accounting was correct.    

Nick0131

Hi Lurker,

I did a terrible job explaining my problem, but I knew there was something bothering me.

Attached is an image of a worksheet comparing the information shown on the transaction display vs a transaction report. I was basing my observations on the displayed information. I would have used screenshots from the apps, but it was confusing because the invested amount and cash were reversed in the transaction report. I don't know why that would be.

The information provided in the display does not add-up to me. However, the transaction report makes perfect sense.

That's pretty much it.

Thanks,

Nick

q_lurker

One thing I take from your picture - multiple lots.
I don't know the rules on SPACs.  Generally I would expect the cost basis and acquisition dates of your three original purchases to transfer to your new holding.  If that is the case, you really need three Add Shares to reflect the three individual lots.  

Again, I am not surprised your FI did not send the information that way.  Most do not.  But in their accounting, you may find they show it that way - as three separate lots.  That is where the Corporate Acquisition behaves better.  It would yield three Add Shares transactions reflecting the cost and dates for your original three lots.

It is not a big deal for you to add to and edit what you have to get the three Add Shares correctly.  You have a good handle on all the information.  When users have had multiple years of dividend reinvestment plans, it can get really cumbersome. 

The information provided in the display does not add-up to me. However, the transaction report makes perfect sense.  

Perhaps the obfuscation is that Amount Invested in a Portfolio View (your "main Page" reference, I suspect?) is not the same parameter as the Amount Invested column on the Transactions report.  I rarely find Amount Invested meaningful in either place. 

Nick0131

Thanks Lurker! Lots of good information. You clearly have a handle on the software, what it can do and how to do it. No doubt you have helped many people along the way. I am actually very happy with the software and have had no real problems since I got set up and straightened out placeholders and so on. It allows me to quickly understand what I have invested and where.

If I get a chance to run a few a few transactions using the other methods you mentioned I will let you know what I think.

Nick

q_lurker

When experimenting or learning about new directions you might want to take,

• It is good (beyond good) to have a backup of your main file, if working in the main file.  Backups are like friends - you can't have too many.
• You can copy the main file and try out things on that copy brrfore doing live in the main file.
• You can create a new file strictly for testing purposes.  I keep a 'test' file, some call them a 'sandbox', that I use when testing new (to me) features or when addressing thoughts and possibilities that develop through questions raised on this site. 

Nick0131

Thanks Lurker! Due to having lived a long time I have learned the hard way (more than a couple of times) the value of backups and not messing with live files. I was wondering if I could create a sandbox, and you have described how to do it.

I do not know if you, Tom and others who have commented are just experienced users or work in further development of the software or both. But it is nice to know there is somewhere to go for solutions.

I will let you know what I think is the best solution after I have 'played' around a bit.

Nick

Jim_Harman

The only people here who work for Quicken are those who have "Quicken" in their user names.

The rest of us are user volunteers who like to help others.

Nick0131

Thanks Jim! You guys, gals are providing a valuable service. While help desks are sometimes staffed by people with real world experience with a product, oftentimes this is not the case. Nick

ronealwa

I will just throw my 2 cents in on how I just did it. I owned $BFT, a SPAC, which converted to $PSFE starting on 3/31/2021. I purchase $BFT in February/2021.

I did the Corporate Name change from Foley Acquisition (BFT) to PaySafe (PSFE) effective date 3/31/2021 (this is the first day of trading for symbol PSFE on the NYSE). That transaction effectively updated the "name" of the "BFT" security to "PaySafe".

I then manually went into the "PaySafe" security item and converted the ticker symbol from "BFT" to "PSFE". It preserved my original purchase transaction of my BFT shares...they are just now labled as PaySafe which is , in essence correct. My # shares owned/cost basis of those shares did not change as result of the SPAC finalizing and converting from BFT ===> PSFE. Starting on 3/31/2021 my shares will begin trading under PSFE and the memoy of BFT only exists as a memo I entered in my Corporate Name Change transaction.

I have no "leftover" cash transactions to deal with.

As far as I can tell, this was the best solution for me.

Good Luck!

mshiggins

For anyone else who is curious, SPAC is apparently an acronym for special-purpose acquisition company. 

Nick0131

> @ronealwa said:
> I will just throw my 2 cents in on how I just did it. I owned $BFT, a SPAC, which converted to $PSFE starting

Nick0131

ronealwa, Thanks for the input! The procedure you detailed looks 'clean'. I have a couple more SPACS. When something happens (good I hope) I will try it and let people know what I think. Thanks, Nick