Adjusting for Mergers

When a company undergoes a merger, stock symbols (tickers) usually reflect the change.   For example, when Hewlett-Packard (HP) merged with Compaq (CPQ), the ticker symbol for the stock traded on the NYSE was changed to HPQ.   This Ticker change can cause trade-matching issues in your data file when importing from broker trade history reports.

 

TradeLog® looks at the Date and Ticker data on your trade history report during the import process to determine proper trade-matching. The ticker description in both the opening and closing transactions must be identical, or the two transactions will not be matched correctly.

 

The Ticker description in each "pre-merger" opening transaction must be adjusted. Please see Selecting a Single Trade for Editing and Editing a Trade.

 

Example:

 

On 10/04/2000, John bought 1000 "pre-merger" shares of Compaq.   On 9/14/2001, he sold

1000 "post-merger" shares.   Due to the change in the stock ticker (reflected on his broker trade history report), the opening and closing transactions were not matched correctly in TradeLog®.

 

Tr	Date	O/C	L/S	Ticker	Shares	Price	Comm	Amount
58	10/4/2000	O	L	CPQ	1000	28.75	$14.95	($28,764.95)
59	09/14/2001	C	L	HPQ	1000	29.25	$14.95	$29,264.95

Open Shares:         2000

 

To correct this, the "pre-merger" opening transaction must be adjusted:

1. John changes the ticker description in the opening transaction to "HPQ", then hits <Enter> twice to save his changes.

    

2. TradeLog® automatically re-matches and renumbers his trades.   The opening and closing transactions are now matched correctly - see below:

 

Tr	Date	O/C	L/S	Ticker	Shares	Price	Comm	Amount
45	10/4/2000	O	L	HPQ	1000	28.75	$14.95	($28,764.95)
45	09/14/2001	C	L	HPQ	1000	29.25	$14.95	$29,264.95

Open Shares:         0

 

 

Adjusting for a company that underwent a merger and a split at the same time can be done as follows:

 

1. Follow steps 1 and 2 above to change all relevent tickers to the new company symbol.

    

2. After changing the stock tickers adjust for a stock split. See: Adjusting for Stock Splits