Difficulty entering a Corporate Acquisition

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Rich
Rich Member ✭✭✭
edited May 19 in Investing (Windows)

Quicken Windows, R56.9.

I’m trying to record a merger transaction in Quicken Windows for the stock for stock acquisition of Earthstone Energy (ESTE) by Permian Resources (PR) that occurred on 11/1/2023. My understanding is that the Corporate Acquisition wizard would convert the holdings and maintain the share history. Using a transaction date of 11/3/2023 to match my broker’s statement, I used the Corporate Acquisition for the conversion of my ESTE holding (530 shares in numerous lots)) and entered the conversion ratio (1.446) and PR average share price on the acquisition date ($14.44) provided in the Form 8937 issued by PR. This generated Added Share transactions for PR that totaled the expected 766.38 shares. However, these shares all show a transaction date of 11/3/2023, whereas I was expecting to see that they would correlate to my actual purchase dates of the ESTE shares. Did I miss a step(s) or just misunderstand what the Corporate Acquisition wizard would do? I checked security details for my ESTE shares and the share history all still seems to be intact there.

I would be appreciative of advice on the best way to proceed from here. If I need to redo this, is there a way to just back out of what I’ve done, or will I need to revert to a backup file to try again?

Comments

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
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    Your understanding of what should have happened here is correct.

    The only "back out" process I know of is to delete the Removed Action and the Added Action transactions for the transaction. You can do this one at a time in the Account's Transaction List, or en masse by using the Banking > Transactions report pulling only from that Investment Account. (Backup first of course before making any changes.)

    You might try validating the file before taking another stab at it.

  • Rich
    Rich Member ✭✭✭
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    Tom thanks for your suggestions.

    I deleted the Removed Action for the ESTE shares and used the Banking > Transactions report to delete the PR added shares; all went well. I validated the file and then redid the Corporate Acquisition step and got the same results. The ESTE shares were properly removed and PR shares were added in the appropriate ratio to result in the correct ES share count of 766.38. However, all transaction dates for the added PR shares were again the same as the date I used for entry of the Corporate Acquisition (11/1/2023 in this case).

    Still thinking that I have to be missing something, I edited my ESTE transaction register to ensure there were no transactions in the security register other than the ones that would be part of this conversion, and that there were no transactions at all in my PR share register (blank slate). I then tried one more time, but got same result.

    At this point, I have a set of PR share transactions that seem to be correct except for not showing the correct acquisition dates. I suppose I could just manually go through them and change the dates to match the original acquisition dates of the corresponding ESTE share lots . Any other thoughts?

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
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    The Add Shares transactions generated by the Corp Acq will all be dated as of the Corporate acquisition date. But each of those Add Shares also carries a date when that lot was acquired. That maintains the cost basis of the lot and its status as a long term or short term holding as time progresses.

    You can edit those Adds to see the associated true acquisition dates.

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited May 20
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    I think @q_lurker most likely hit on the correct answer here. Within the Added action is a "Date Acquired" field and that should reflect the correct holding period.

    For whatever reason I was translating "transaction date" to "date acquired" The transaction date should reflect the date the deal occurred and should be the same for all lots, , but the date acquired in the various Added actions should adhere to each lot's original date acquired.

  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
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    I think the intended word is field rather than file: Within the Added action is a "Date Acquired" field.

    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the Quicken Windows FAQ list

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
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    Fixed. Thanks.

  • Rich
    Rich Member ✭✭✭
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    q. lurker/Tom,

    I just got back to this and able to confirm that my Quicken file does show the correct acquisition dates as described above. Thanks for the clarification on how the Corporate Acquisition action works.