A Mylan Investor Relations representative just telephoned with the answer to my question posted on the Mylan website last week. Each share of old MYL exchanged for the "New Mylan" stock will be taxable as a capital gain. They expect to close during the first quarter of the 2015 tax year. (Sorry for the bad news…GLTA)
I will vote my shares AGAINST the deal. I am all for the strategic aspect, but I am against forcing long term shareholders to pay LT capital gains tax.
Mylan management should restructure the deal so that the company remains domicile in the US.
The tax consequences are clearly stated in the official company press release.
Look for it on the Mylan web site or on Yahoo news headlines on Monday morning.
Sentiment: Strong Buy
If the shareholders are going to have to pay capital gains on all of their MYL holdings without receiving any cash as a result of this transaction, then this is without a doubt the most disgraceful and vile thing that I have ever heard of. I don't like these kinds of tax "dodges" that MYL is trying to pull - I think that they totally stink to high heaven. I hope that this deal is voted down or that federal regulators nix it. Any shareholder that has considerable appreciated value in their stock would be insane to vote in favor of this rotten deal. What are the shareholders going to gain? A "possibility" of a higher stock price in the "future"? Also, why is Abbott selling its generic business anyway if it is so great????
But why the company do not come out and say it clearly that this exchange will be taxable?
Wait and see. no need to sell now IMO.
Sentiment: Strong Buy
This transaction is a tax inversion. Upon the conversion of our stock from the old MYL to the new MYL, whatever capital gain or loss you have will have to be recognized in its entirety.
It is ridiculous but that is what will happen unless it is voted down. Not much of a chance on that.
1.Today's upgrade by Bank of America target price to $67.
2.And lets look at the PE at now 31 and next year forwarding PE at 13.
Only a major law suit will deter the trend.
Sentiment: Strong Buy
You keep saying "My understanding is this", "My understanding is this", etc. Where are you getting your information on the tax consequences? Nobody should be speculating on this. I've called the company and asked for a complete explanation of tax issues. If all of the long term shareholders are going to basically have to cash out their interests and incur full tax liability, this is going to be an absolute disgrace and is going to meet with severe shareholder resistance. Frankly speaking, I think that your explanation is wrong for a number of reasons which I don't have time to get into. But, we will see what the company says.
There is stuff you can do to limit the potential tax liability in case the stock price continues on an upward path over the next six months, or so...just prior to the closing of the deal.
My understanding is that options are exempt from this onerous tax treatment. In other words, if you own long term calls expiring in 2016 that are well in the money...the only thing that will change is the deliverable...but you will not be forced to sell or exercise your position..so there is no tax consequence. If you exercise in 2016, your cost basis will be the strike price plus whatever premium you paid for the calls.
So..if you really wanted to get creative.. you could establish a synthetic long position using strictly option contracts (i.e 2016 LEAPS) that mirror your existing position. Then you can elect to sell the shares to place a cap on the potential tax liability, or write covered calls against the shares in order to partially finance the tax obligation going forward..
Yikes.....so it is equivalent to selling out the entire position. Yes, I have some shares held from the 1992 era...and yes, it is in a taxable account. I have been staging some small sales along the way to manage the gain, but this will destroy that strategy. Experience sure is a tough teacher. I followed the mantra that postponing gains was the best strategy. But several years ago, I noted the downside when dealing with a stock like Mylan that may have grown multi-fold over the years. When you sell 20+ years later, there is no accommodating the fact that the gains were earned over a long period. It is treated more as if that was your annual, normal income. Live and learn.
My understanding is that shares of the old Mylan will be sold, and exchanged for shares of the new Mylan on a 1:1 ratio. Therefore, individual shareholders holding MYL shares in taxable accounts will likely incur a tax liability as a result of the short or long term gains they will have to report the year the transaction closes. The price of the new Mylan shares will continue to trade at the same price of the old Mylan shares..so this will be pretty transparent for shareholders. The cost basis of the new shares should then be the selling price of the old shares.
So..if you are holding MYL shares in a taxable account and do not have any offsetting losses....you will have a tax bill that you will have to meet sometime in 2015-16.
Those who have held MYL shares over 35 years...are really being thrown under the bus....because their cost basis probably is in the range of $0-$1.
I read some references to the fact that current MYL shareholders would incur some tax event here. But I did not see any thorough explanation of the details. I presume that gain is a result of the exchange of shares from the old MYL to the new MYL. Is it then expected that the new MYL shares will be priced approximately 21% higher than the older ones? Would that tax gain be long term capital gains for long term holders? I also presume that would affect one's cost basis after that transaction. Any details would be appreciated.
Mylan a super stock to own. Today's Abbott news created too much exhuborance for stock. Price shot up too fast and volume exploded. Next buying opportunity in $47-$48 area for a move to $54. Best strategy is to buy on dips and trade for 15% move. Place stops $1 under your entry points.
I had an mri on my knee recently Medicare paid $50.00. It took 40 minutes, 15 minutes to set up. I wouldn't have done it for that.