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Eagle Rock Energy Partners, L.P Message Board

rockyrococco 2 posts  |  Last Activity: Jul 8, 2016 2:13 AM Member since: Feb 13, 1999
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  • rockyrococco by rockyrococco Jul 8, 2016 2:13 AM Flag

    Here's how I think you calculate your basis in both new HTZ and HRI. I had 500 shares on June 30, 2016.
    On July 1, 2016, after the spinoff and reverse splits, I had 100 shares of new HTZ and 33 shares of HRI, plus I received $13.54 for a partial share of HRI. The July 1 opening price of HTZ was $44.50 and the opening price of HRI was $34.40. So the TOTAL value of the new shares is (100 * 44.50) + (33 *34.40) + 13.54, or $5598.74. The percentage of this total allocated to HTZ is 4450/5598.74 = .79482 (we usually calculate out to 5 places)., which means the allocation to HRI is 1-.79482 or .20518. So the cost of new HTZ shares is .79482 * cost of old HTZ, and the cost per share basis is this amount divided by 100 shares of new HTZ. If you received cash for partial HTZ shares, you have to subtract that amount from the adjusted new HTZ cost.
    Likewise, the cost of all HRI shares in this example is (.20518 * cost of old HTZ) - 13.54, and the share basis is (.20518 * cost of old HTZ) / 33. I think you have to account for the cash in lieu of fractional shares as a return of capital.

    Can anyone confirm my assumptions? Maybe we should use the closing price on July 1 to calculate the value of new shares?

  • Reply to

    Split Math

    by alexalekhine Jul 1, 2016 8:37 AM
    rockyrococco rockyrococco Jul 8, 2016 1:18 AM Flag

    Not logical at all. The company should have put out a note on how to allocate the cost basis, but I haven't found it yet. The total cost of HTZ + HRI + any cash for partial shares should still equal what you paid for the original HTZ shares. Bad shareholder service from HTZ Investor Relations. Anyone know the basis allocation?

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