How do I enter a complex Stock Merger - FTRPF --> REUN + FTHWF

KarenT

How do I enter a complex Stock Merger where 500 shares of FTRPF became 100 shares of REUN and 429 shares of the reorganized FTHWF (was FTRPF). There was then $.14 received as cash-in-lieu from FTHWF.

Ps56k2

are you entering this manually - vs downloading from your brokerage ?

500 shrs of $.28 penny stock ?
https://finance.yahoo.com/quote/FTHWF/
… I have also updated the topic title to better reflect the actual Q&A 

KarenT

I'm entering it manually because the downloaded information did not post correctly. I gave me only a 1:5 stock split for the REUN shares, but no 429 shares of the new FTHWF stock

q_lurker

My reference is:
https://www.meetfieldtrip.com/news/news-details/2022/Field-Trip-Announces-Closing-of-Plan-of-Arrangement-and-19.9-Million-Private-Placement-Financing/default.aspx

Applying that information in Quicken-speak:
The original company - Field Trip Health Ltd.) (TSX: FTRP, Nasdaq: FTRP) - broke into two companies.  They spun-off a new company - Field Trip Health & Wellness Ltd. - and then renamed the original company as Reunion Neuroscience Inc.

There are varied ways approach this in Quicken.  First and foremost, back up your data file!!!  I would then delete the associated downloaded transactions,  Further, I would delete the FTHW security.  If the REUN security exists separate from the FTRP security, I would also delete the REUN security.  I suggest:

1. Corporate Securities Spinoff - to generate the FTHW holding
2. Sell Shares - to sell the fractional FTHW share for the cash in lieu amount
3. Stock Split - of the FTRP shares at a 1:5 (0.20) ratio
4. Corporate Name Change - from Field Trip Health Ltd. to Reunion Neuroscience
5. Edit the renamed security to change the ticker
6. Edit the spinoff generated transactions for clarity and compatibility with brokerage information 

The spinoff - Use the Enter Transactions button, select Corporate Securities Spinoff.  Although my reference cites an August 11 effective date, it appears trading of the new companies only began on August 17.   Using that 8/17 date since prices are available for that date, I find REUN at 4.21 and FTHW at 0.60.  But that REUN valuation appears to be after the 1:5 split.  The pre-split value would then be 0.842.  The ratio is 0.85983356.  Using those three values, Quicken will calculate that just under 38% of the original basis of your FTRP holding will transfer to the new FTHW holding.  Is that close to what your brokerage
shows?  If close, carry on.  If not, my info or their numbers are off; reset.

That spinoff with that ratio will generate an Add Shares of FTHW with 429.91678 shares.  You then need to sell the 0.91678 fractional share for the $0,14 you said you got as cash in lieu.  That price/share seems off and may need review, but at that amount, too much review may be excessive.  Why bother.  That should result in your reported share quantity of 429 shares of FTHW.

The stock split at a 0.2 for 1, 1 for 5, 100 for 500 shares should be easy enough.

Using the Corporate Name Change will change the entire history of FTRP to be Reunion Neuroscience.  While that might seem inappropriate, it is still the simplest approach.  There are other ways to handle that name change, if need be.  

Because the name change does not alter the ticker symbol, that change needs to be made by editing the Security Details.  With that edit, you should copy the old prices to the new ticker.  I would delete the old prices but either choice on that second option is OK.  

Editing the three spinoff generated transactions - my personal choice, wholly optional.
From your brokerage
What was the cost basis of the FTRP holding before this stuff? _A__
What is the cost basis of the REUN holding after this stuff? _____B__
A - B = C.  Per your brokerage, C should be the cost basis shown in the Add Shares transaction.  If the numbers appear to be close, I would edit that transaction accordingly.
C should also be the Amount of the RtrnCap transaction. 
Identify the closing price for the FTHW shares on the date of this transaction (8/17)
The Market Value of the RtrnCap transaction should be that closing price times the number of FTHW shares (possibly 0.60 * 429.91678 = 257.95). 
With that Market value entered, you can then delete the MiscInc transaction that was generated.

With all that done, your Quicken data should be consistent with itself and with your brokerage date.

Hope all that is clear enough.  

KarenT

Thank you for this. I believe I got all the transactions entered correctly. It seems to have all the info in the right places. I'll reconcile my accounts to make sure.