Unit splits?

[ValueMan2014]

I bought WLRHU (a unit) and split it into:

WLHRW (warrants)
WLHR (common)

the shares on each will stay the same.

I thought about using the spinoff functionality but its actually two child with a removal of the parent?

How should I account for this?

[Mark]

Hi ValueMan2014,

What are the details of how it actually split into 2? Did you buy X shares of WLRHU, and then those turned into X shares of WLHRW, plus X shares of WLHR? How is the tax basis distributed?

[ValueMan2014]

Its based on allocation of the cost basis of the original stock relative to first day of trading

so I paid

10.22 for 100 shares of WLRHU on 6/9

split them on 8/18 into:

100 WLRH -closed $9.88
100 WLRHW - closed $.73 + $11.50 strike price per 2 warrants = $11.84

so its 9.88 for WLRH
and 11.84 for WLRHW

[Mark]

Hi ValueMan2014,

It sounds like you'd be best off doing a name change on WLRHU to WLRH and then also a spin-off from WLRH for the warrants (WLRHW). For the warrants it sounds like the price should really be 0.73. You don't typically have the strike price in the closing price of your investment. They may have a strike price of $11.50, but the per-share price of the warrants themselves are 0.73 it sounds like. If you actually exercise the warrants, then you would sell them, and record a purchase of the underlying stock.