Heads up for GE stock owners.... [Reverse stock split]

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Broken Man 1999
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Heads up for GE stock owners.... [Reverse stock split]

Post by Broken Man 1999 »

General Electric (GE) Reverse Split
Rate: 1 for 8

Your Vanguard Brokerage Account is showing an inflated balance while we process a reverse split on the above security. The balance(s) will display correctly tomorrow. Cost basis information will be updated within 2 business days. No action is needed by you as this is a mandatory event.

*A reverse stock split increases the price per share of a security and decreases the number of shares with fractional shares paid in cash. For example, if you own 100 shares of GE stock trading at $13 a share and the company decides to do a 1 for 8 reverse split, you will now own 12 shares trading at $104 with 0.5 shares paid in cash. The value of your investment remains the same.


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Re: Heads up for GE stock owners....

Post by RickBoglehead »

How to boost share price in a dying company... Sad. :-|
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Re: Heads up for GE stock owners....

Post by Wiggums »

RickBoglehead wrote: Mon Aug 02, 2021 8:27 am How to boost share price in a dying company... Sad. :-|
I was thinking the samething!
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by LadyGeek »

This thread is now in the Investing - Theory, News & General forum (news). I also clarified the thread title.
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Electron
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Electron »

I saw the same message in my brokerage account this morning.

My first thought was that I would wind up receiving fractional shares as cash. That typically results in extra work at tax time with entries on Schedule D.

I really lucked out this time. My 960 shares will reverse split to exactly 120 shares. :happy :happy
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by gobel »

That was actually on the news yesterday because many feeds were showing a 700% gain in GE and causing quite a bit of confusion.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by kudzu »

Is the cash in lieu of fractional shares a taxable event? Seems like it should be. So I looked at my distribution payouts on vanguard and there's one that's all zeros for GE. Suspicious. I guess they'll sort it out eventually. Not like it matters much given the tiny amount.

Sadly, this is one of the cats and dogs I held onto from a little dividend portfolio I've been dismantling slowly over time. At least there's a capital loss I can use some day. :oops:
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Broken Man 1999 »

Not everyone sees GE as a dying company. A previously poorly managed company, prone to collecting other companies, yes!

--BofA Securities Adjusts General Electric's Price Target to $128 from $120, Keeps Buy Rating
08/02/2021 10:08 a.m.

-Wolfe Research Adjusts General Electric's Price Target to $138 From $136, Keeps Outperform Rating
08/02/2021 09:01 a.m.

--RBC Adjusts Price Target on General Electric to $123 From $16 After 1-for-8 Reverse Stock Split; Outperform Maintained
08/02/2021 08:47 a.m.

Time will tell.

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Broken Man 1999
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Broken Man 1999 »

kudzu wrote: Tue Aug 03, 2021 8:49 am Is the cash in lieu of fractional shares a taxable event? Seems like it should be. So I looked at my distribution payouts on vanguard and there's one that's all zeros for GE. Suspicious. I guess they'll sort it out eventually. Not like it matters much given the tiny amount.

Sadly, this is one of the cats and dogs I held onto from a little dividend portfolio I've been dismantling slowly over time. At least there's a capital loss I can use some day. :oops:
Look in your settlement account.
Vanguard Federal Money Market Fund (Settlement fund) $5.32

You should also see this if you click on your holding:
08/02/2021-Corp Action (Cash in Lieu)-$5.32

Mine checks out, gotta see what I can do with that $5.32!

I don't have capital losses, besides, mine is in my TIRA.

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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by kudzu »

Broken Man 1999 wrote: Tue Aug 03, 2021 10:22 am Not everyone sees GE as a dying company. A previously poorly managed company, prone to collecting other companies, yes!

--BofA Securities Adjusts General Electric's Price Target to $128 from $120, Keeps Buy Rating
08/02/2021 10:08 a.m.

-Wolfe Research Adjusts General Electric's Price Target to $138 From $136, Keeps Outperform Rating
08/02/2021 09:01 a.m.

--RBC Adjusts Price Target on General Electric to $123 From $16 After 1-for-8 Reverse Stock Split; Outperform Maintained
08/02/2021 08:47 a.m.

Time will tell.

Broken Man 1999
Well, it dropped by a lot more than those price targets! I was too complacent to get out when I should have. That's not saying that mgmt. isn't making the hard decisions to streamline the company, now. Its evident they are.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by kudzu »

Broken Man 1999 wrote: Tue Aug 03, 2021 10:34 am
kudzu wrote: Tue Aug 03, 2021 8:49 am Is the cash in lieu of fractional shares a taxable event? Seems like it should be. So I looked at my distribution payouts on vanguard and there's one that's all zeros for GE. Suspicious. I guess they'll sort it out eventually. Not like it matters much given the tiny amount.

Sadly, this is one of the cats and dogs I held onto from a little dividend portfolio I've been dismantling slowly over time. At least there's a capital loss I can use some day. :oops:
Look in your settlement account.
Vanguard Federal Money Market Fund (Settlement fund) $5.32

You should also see this if you click on your holding:
08/02/2021-Corp Action (Cash in Lieu)-$5.32

Mine checks out, gotta see what I can do with that $5.32!

I don't have capital losses, besides, mine is in my TIRA.

Broken Man 1999
Oh, I did get the corp action cash. I'm just wondering what tax lot the cash applies to or if this is even supposed to be taxable in the first place.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Ocean77 »

This is one of my holdings in my little fun account where I pick my own stocks. I started buying GE in 2019, and bought more in March last year. This is the type of stock I like, one that everybody hates. So far it's up 52% for me.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by vg55 »

Now that Immelt and Bornstein are gone from GE leadership, GE has a good chance to rebound over time.

Those two clowns couldn't manage a canoe let alone a MegaCorp.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Doc »

I don't know if the extra fractional share is taxable or what. My extra 1/2 share just disappeared. :confused

And I am not going to worry about it.

But I still have 2 shares of WABEC from a previous GE spinoff. :D
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by F150HD »

who owns/owned it & got out of their position or is planning to get out?
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Electron »

kudzu wrote: Tue Aug 03, 2021 8:49 am Is the cash in lieu of fractional shares a taxable event?
I have had fractional shares sold and paid in cash a number of times and it has always been a taxable event. That assumes that there was a capital gain or capital loss.

It does make sense for taxable accounts. If a sale of those same shares was taxable the day before the reverse split, the shares should be taxable the following day.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Nicolas »

F150HD wrote: Wed Aug 04, 2021 12:11 pm who owns/owned it & got out of their position or is planning to get out?
I sold all of my GE stock five years ago next month at $30/share ($210 post reverse-split). I had held it for decades. It was a third of my portfolio so my timing was fortuitous to say the least! I redeployed the proceeds into index funds and rode the wave higher while GE sank! I haven’t always been this lucky.
Last edited by Nicolas on Thu Aug 05, 2021 7:34 am, edited 1 time in total.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Doc »

Electron wrote: Wed Aug 04, 2021 2:48 pm
kudzu wrote: Tue Aug 03, 2021 8:49 am Is the cash in lieu of fractional shares a taxable event?
I have had fractional shares sold and paid in cash a number of times and it has always been a taxable event. That assumes that there was a capital gain or capital loss.

It does make sense for taxable accounts. If a sale of those same shares was taxable the day before the reverse split, the shares should be taxable the following day.
The sale of the fractional shares has been my experience also. But it looks like that didn't happen here. Maybe they just adjusted the cost basis of the new shares to make the correction.

But maybe that would be a broker thing not a GE thing.
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Re: Heads up for GE stock owners.... [Reverse stock split]

Post by Electron »

Doc wrote: Wed Aug 04, 2021 4:04 pmThe sale of the fractional shares has been my experience also. But it looks like that didn't happen here. Maybe they just adjusted the cost basis of the new shares to make the correction.
I've had fractional shares show up in the current year realized capital gains and losses section. To check any changes in cost basis you may need to find the basis prior to the transaction.

The Wabtec spin-off was an interesting case with the 2019 Form 1099-DIV reporting the Wabtec shares as a taxable qualified dividend. My brokerage account at the time showed the transaction as a stock split. There was no indication in the account or statements for the remainder of the year that the spin-off was a taxable dividend. I eventually found that information online but had to wait for the 1099-DIV for final confirmation.
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