Skip to content
New issue

Have a question about this project? Sign up for a free GitHub account to open an issue and contact its maintainers and the community.

By clicking “Sign up for GitHub”, you agree to our terms of service and privacy statement. We’ll occasionally send you account related emails.

Already on GitHub? Sign in to your account

Determine when the acquisition happened and therefore what FMV options are present #11

Closed
2 tasks
hickeng opened this issue Feb 15, 2024 · 3 comments
Closed
2 tasks
Labels
cpa Needs CPA - ideally description is curated such that it can be directly used as a query enhancement New feature or request question Further information is requested

Comments

@hickeng
Copy link
Owner

hickeng commented Feb 15, 2024

The date quoted is 2023-11-22 but for the purposes of FMV assessment, was the acquisition processed between close on that date and trading on the 23rd? During trading on the 22nd? Between 21st and 22nd (f8937 uses close of the 21st for the FMV of fractional shares).

To determine FMV it's necessary to know the precise knowledge that was available to a hypothetical buyer/seller pair, which depends on precisely when the execution occurred.

Speculative options for FMV based on differing knowelege:

  • During trading on 2023-11-22
    • Open: 983.69
    • High: 987.99
    • Low: 971.00
    • Close: 972.00
    • Mean - $979.50
  • can we use adjusted close (for splits and dividend and/or capital gain distributions) instead of quoted close?
  • add the data needed to assess various options into the Reference sheet and add to the FMV dropdown

Yahoo Finance market data for the period in question

@hickeng hickeng added enhancement New feature or request question Further information is requested labels Feb 15, 2024
@hickeng hickeng added the cpa Needs CPA - ideally description is curated such that it can be directly used as a query label Feb 19, 2024
@hickeng
Copy link
Owner Author

hickeng commented Mar 3, 2024

From costbasistools.com

Comments on the merger of VMware Inc Class A common/Palo Alto CA-VMW-stock election at average price with Broadcom Inc common/San Jose CA-AVGO:

Stock election by 96% of holders was oversubscribed and limited to 50 % of total merger consideration. Consideration prorated at 47.9% of $142.50 cash and 52.1% of 0.25200 AVGO common stock. AVGO market value of $979.50 based on average 11/22/2023 price per Form 8937 guidance. Use of 11/22/2023 closing price of $972.00 is also an acceptable IRS method.

@kevinbuhmann
Copy link
Contributor

From the merger agreement:

Unless the parties otherwise agree in writing, the closing of the transactions will occur on the third business day following the date on which all conditions to the transactions set forth in the merger agreement have been satisfied, or, to the extent permitted by applicable law, waived (other than those conditions that by their nature are to be satisfied at the closing of the transactions, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions at the closing of the transactions). The first merger will be effective as of 11:59 p.m., New York City time, on the business day prior to the closing date. The second merger will be effective at 8:30 a.m., New York City time, on the closing date or at such other date and time as is agreed to by the parties and specified in the certificate of merger for the second merger.

https://www.sec.gov/Archives/edgar/data/1124610/000114036122035833/ny20005454x1_defm14a.htm

@hickeng
Copy link
Owner Author

hickeng commented Mar 26, 2024

@kevinbuhmann That's fantastic detail... and I've no idea what to do with it! When I wrote this issue I was expecting there to be a single point in time.

I suspect the only rational date to use is the 11:59pm one given after that there's no hypothetical possibility of shares changing hands.

I added the various different FMV options for the 22nd into the sheet a while back, with mean selected by default given that's the value quoted in Form8937.

I'm going to close this - more options than currently exist seems likely to just add confusion and the custom field should allow for it anyway.

Sign up for free to join this conversation on GitHub. Already have an account? Sign in to comment
Labels
cpa Needs CPA - ideally description is curated such that it can be directly used as a query enhancement New feature or request question Further information is requested
Projects
Development

No branches or pull requests

2 participants