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truthisntstupid (83.48)

Anyone Care To Tell Me What The Point Of Hanging On To A Caps Pick Through A Spin-Off Is?

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January 04, 2012 – Comments (11) | RELATED TICKERS: ABT , ITT

I don't need to make this an excessively long blog.

I just closed ABT. I can't see a good reason to keep it open when it's ahead by 20 points and sometime in the coming months it's going to do a spin-off. 

Spin-offs don't seem good for CAPS picks. To actually have been holding ABT since my start date would be very good indeed. Then I would receive shares in the companies spun off, in addition to the ABT shares I would still be left holding.

To have been an actual shareholder in ITT would probably have been good, too. I don't know, I haven't checked in awhile. I bet shareholders came out pretty good with ITT. 

CAPS players with ITT as a pick did not. ITT is still down (- 29) or so for me. I don't think actual shareholders did that badly. I don't feel like checking it out, but I bet actual shareholders did OK.

So today I closed ITT as a CAPS pick too.

I don't think spin-offs are good for CAPS picks, from what I've seen. 

11 Comments – Post Your Own

#1) On January 04, 2012 at 3:18 PM, truthisntstupid (83.48) wrote:

I seem to recall ITT being a good CAPS pick for me up until the spin-off.

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#2) On January 04, 2012 at 4:38 PM, portefeuille (99.74) wrote:

Spin-offs are usually treated like dividends. bloomberg usually treats these "events" the right way. So if the "pre-event" "caps" game starting prices differ "materially" from those shown at bloomberg.com use the "contact us" feature -> http://caps.fool.com/FeedBack.aspx.

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#3) On January 04, 2012 at 4:46 PM, portefeuille (99.74) wrote:

#2 The GNE spin-off, for example, is treated the right way ...

http://caps.fool.com/Ticker/IDT/Scorecard.aspx?pagenum=1&filter=0&pageSize=99&sortcol=22&sortdir=1

Genie Energy ‘GNE’ to List on NYSE

http://www.bloomberg.com/apps/quote?ticker=IDT:US

http://www.bloomberg.com/apps/quote?ticker=GNE:US

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#4) On January 04, 2012 at 4:48 PM, portefeuille (99.74) wrote:

So if the "pre-event" "caps" game starting prices differ "materially"

So if the "pre-event" "caps" game starting prices (for "calls" not closed before the "event") differ "materially"

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#5) On January 04, 2012 at 4:50 PM, truthisntstupid (83.48) wrote:

ITT spin-off was treated liike a dividend, porte. But my CAPS score for ITT was still down about 30 points and the spin-off was months ago. I think if I go back and examine how actual shareholders have done, I'll find they've done remarkably better than the CAPS score for ITT would indicate. As a matter of fact, I think I'll do that.

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#6) On January 04, 2012 at 5:26 PM, truthisntstupid (83.48) wrote:

Nah...actual shareholders have done no better.  But if XYL or XLS had either one had any significant gain in price, they would have. Actually, this whole ITT spin-off doesn't appear to have been good for shareholders. It probably still can and will be. But if either of ITT's former subs take off and ITT doesn't, then actual pre-spin-off ITT shareholders could have good returns while ITT languishes as a CAPS pick.

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#7) On January 04, 2012 at 5:29 PM, truthisntstupid (83.48) wrote:

The thing is, this could happen with ABT too. So I'm locking in my CAPS gains.

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#8) On January 04, 2012 at 9:23 PM, truthisntstupid (83.48) wrote:

I never did understand exactly what happened when ITT split...and I was trying to figure out how my new start price was arrived at after the fact. I spent hours trying to figure out what my original start price was after the split had already been done.

Not this time.

Now, I'm tracking exactly what has gone on since I made ABT a pick, for my own future reference in understanding exactly how both CAPS and Yahoo!Finance handles the split when it happens.

Original start price..................................................$47.49

1/12/11 Dividend..........................$0.44

1/12/11 X-div day opening price....$47.82

New Start Price, 1/12/11.........................................$47.06

4/13/11 Dividend..........................$0.48

4/13/11 X-div day opening price....$50.56

New start price, 4/13/11...........................................$46.62

7/13/11 Dividend...........................$0.48

7/13/11 X-div day opening price.....$53.07

New start price, 7/13/11...........................................$46.20

10/12/11 Dividend..........................$0.48

10/12/11 X-div day opening price....$52.27

New start price, 10/12/11.........................................$45.78

 

Now I'll know my original start price, my ending start price, and the dividends received should I want to know them in the future.

Closed 1/04/12 @ $56.36.

This time I'll be able to figure out what they did!

It won't be like the last time with ITT, here:

 http://caps.fool.com/Blogs/help-mfitt-splitspinoff/663680

 

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#9) On January 04, 2012 at 9:35 PM, truthisntstupid (83.48) wrote:

Since I know how to do the start price calculations, I'm going to continue figuring out what my new start price would have been each time a dividend is paid, even though it isn't an active pick any more.

Then, I'll be able to figure out exactly what CAPS and Yahoo!Finance do when the split happens. 

ABT next goes X-div on 1/11/12...$0.48 dividend next wednesday. I'll figure what my new start price would have been when I know the X-dividend day opening price. And I'll keep doing this up until the split.

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#10) On January 05, 2012 at 11:50 AM, truthisntstupid (83.48) wrote:

Further note to myself:

Can also watch what happens to Wifeb, izzy, or wc, who all 3 have start dates and start pricesfor ABT identical to mine.

Will look at their start prices post-split.

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#11) On January 12, 2012 at 5:24 PM, truthisntstupid (83.48) wrote:

Taking up where comment #8 left off:

New start price, 10/12/11.................................$45.78

1/11/12 dividend.............................$0.48

1/11/12 X-div day opening price......$55.65

New start price, 1/11/12...................................$45.38

OK. Seems to me that $45.388509 should be rounded to $45.39, not $45.38. But Wifeb and izzy (comment #10) are now each showing a start price of $45.38, so I'll go with that.

 

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