Comment on a Stock Split event
I currently own shares in Cooper Companies, Inc. This week (2/20/24), a 4:1 stock split became effective. For this holding, I download QFX files and import those into Quicken. Prior to that download and import, I manually entered a 4:1 StkSplit transaction for this event.
As I did so, Quicken first prompted me about a new security asking if it was a match to my current Cooper security or a new security. I identified it as a match to the existing security.
Quicken then included two transactions - a Remove Shares for an Unidentified Security (25 shares) and an Add Shares for the Cooper security (100 shares). What is going on, one might ask.
From an online reference (emphasis added):
The Cooper Companies, Inc. (COO) has announced a 4-1 stock split of their common stock. Each share will split into four (4) shares of common stock. Surrender of certificates is required. In conjunction with stock split the CUSIP number will change to 216648501. These changes will become effective on Tuesday, February 20, 2024.
Because the CUSIP changed, when the FI reported securities held, there was a mismatch - No current security in my file with the xxxxx8501 CUSIP. Quicken then correctly asked me if this was a new security. Since the name closely matched a security existing in my current file (or possibly because the ticker was the same), the program suggested (correctly) to me that the new (CUSIP) security might have a match in my file. When I agreed that they were the same, the program changed the CUSIP to the newer identifier.
Then the program processed the transactions. First, it came upon a Remove Shares for a security that did not match any in my file (the old CUSIP did not match anything in the current set of CUSIPs). Thus, the program (correctly) reported that transaction was for an Unidentified Security. The Add Shares properly associated to the Cooper holding under the new CUSIP identifier.
I deleted the two download transactions and all is well and good by me.
The FI was correct in updating the CUSIP, reporting the shares of the old CUSIP as removed, and reporting the shares of the new CUSIP as added. HOWEVER, I am confident that had I accepted that pair instead of the StkSplit transaction, I would have lost cost basis info on that holding. For my needs, the StkSplit transaction is clearer and cleaner.
This may be a partial explanation for the cases where FIs choose to send Remove and Add Shares rather than the 'simpler' StkSplit transactions.
As I see it, the FI did it right, Quicken did it right, and I did it right (the way I wanted it). Personal manual oversight was and is appropriate.
Comments
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@q_lurker I have learned (sometimes the hard way) that any Stock Split or Add - Remove Shares requires human intervention, a lot of times to verify cost basis. I have never had a stock split that has worked perfectly. There is always some tweaking involved.
If I have issues with how a downloaded investment transaction should be posted to Quicken, I sometimes go to the FI or fund website to see if there are any insights that might help.
Your situation was indeed complicated, but you were able to solve the various issues without assessing blame on Quicken or the FI. It simply boils down to the limitations of what programming can do vs. human problem solving.
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Your situation was indeed complicated, …
Actually, I disagree with that assessment. While my explanation was 'lengthy' or 'verbose' for clarity, the basics were actually pretty simple, IMO. By NOT treating Quicken and my FI as black boxes and being ahead of the game with my understanding, everything flowed quite simply.
Perhaps I should have added that a Quotes update within Quicken was the prompt that sent me checking on this event before the FI download was requested.
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@q_lurker yes I find that a quote update is the first thing I notice as well. As for complicated or not, it still requires the ability to assess the situation so to solve it.
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