Abbott closed at $44.25. Therefore the price basis for the Hospira stock is based upon $4.425/share? Huh?
The cost basis would be 1/10 of the cost basis of the Abbott holdings that I have?
You are mathematically correct, if the laggard trades at $20 w/o a split, then Myles will cut the dividend 'cause he doesn't want the bagholders to make money. It has been his mantra for the last 6 years. When Plute complained about his $33 mln bonus, he spun off HPD to cash in a large number of tax-free millions fer sherr. I am the only one to point this out because it is the truth.
You are wrong IMHO.
The laggard was manipulated BIG TIME today fer sherr ... that vast Jewish conspiracy, I tell you! Greenspan tried to circumcize the income securities, Jayzus.
C'est la vie! Kiki
...one more thing.
Your basis for HSP is whatever the May 3rd opening price is. That's the tax-free part of the deal -- you get HSP shares for free, but you get to treat them as if you paid full price for them. If they open at $29.01, and you sell later for $39.01, your gain is only $10 per share, not the full $39.01.
Your basis for your ABT shares remains unchanged.
Boy, I sure hope you don't do your own taxes. your cost basis is not the opening share price. Read the previous posts on how to determine cost basis. The cost basis of HSP will be a percentage of your ABT cost basis. Once the spin off takes place on May 3, you will likely be able to get the cost basis formula from ABT's web site.
Abbott Lab is right about the wi. But wrong about ABT fundamentals which are not good. After this settles down one should buy the HSP. I am going to wait and see if it falls a bit. The point has been made over and over the small spin-off often does very well.
TA for ABT:
Check out prior messages on this board. ABT closing price does not determine HSP spin-off price -- not today, not next week. HSP is currently already trading as a 'when issued' stock, closed today at $29.01. Whatever HSP_WI closes at on April 30th, that will be the official opening price of HSP on May 3rd. 10% of that amount will be the decline in ABT, reduced from whatever its market value is on April 30th.
If today were April 30th, then next business day May 3rd, HSP would open at $29.01, and ABT would open at $41.35.
You sound right.Can you discuss timing for possible sell ABT @ higher price before 30 April or do you have to hold until 3 May with reduced price? Seems a way of getting both HSP & higher ABT price unless ABT as pure pharma has higher divy & rates higher PE. Some discussion appreciated.TIA