How to handle the AAPL stock split

After the close of trade on June 6th, 2014, Apple Inc. (AAPL) underwent a 7-for-1 stock split. The split was effective for anyone who owned shares at the end of trade on June 6th.

The AAPL split was a standard stock split. The number of shares owned before the split is multiplied by 7, while the share’s price is divided by 7. Thus the market value of your holding remains the same after the split.

The new shares have the same voting rights as the old shares and will continue to trade under the AAPL ticker symbol. Tim Cook, Apple’s CEO said that the split would help make Apples shares “more accessible to a larger number of investors.”

If you own shares in AAPL, there is more than one way of handling this split in StockMarketEye. (Full disclosure: I own shares in AAPL.)

AAPL Stock Split – Manual Entry

If you have not used the brokerage import to create your portfolio, you can manually split the shares of your AAPL holding by entering a new “Split” transaction (StockMarketEye does not do this automatically for you). You can do this by following the steps in the “Entering a Stock Split” page from our User’s Guide.

Note that you should record the split transaction with the date of June 7th, rather than June 6th. The split occurred after the close of trade on the 6th, so the closing price on the 6th does not yet take into account the split. Because of this, if you record the split with the date of June 6th, you’ll have a large spike in your portfolio’s market value chart on that day. Specifying the date of June 7th in the split transaction will avoid this issue.

Via Update from brokerage…

If you created your StockMarketEye portfolio by importing from a brokerage, you should run the Portfolio -> Update from brokerage… menu to pull in the latest transactions from your brokerage. These transactions normally should account for the split and your current holdings (i.e. Prices view) will be updated accordingly. Check your “Transactions Report” to see the details of what the broker did to account for the split.

However, your brokerage may not handle the split cleanly and you may have to make adjustments to your StockMarketEye holdings after the fact. Here are 3 ways that brokerages will account for the split and how they work in StockMarketEye.

1. Using a “Split” Transaction

This is the proper way of handling a stock split. The brokerage simply includes a “Split” transaction when you update from brokerage and that split is applied by StockMarketEye to your portfolio. This is the same as entering the Split details manually in StockMarketEye.

2. Using a “Shares In” Transaction

The brokerage includes a new, “Shares In” transaction for APPL that contains the additional number of shares. These shares are applied (i.e. added) by StockMarketEye to your portfolio so that the total number of shares you own equals the pre-split number of shares plus the new shares from the “shares in” transaction.

This is a less “clean” way of handling the situation as the individual sub-lots in your Prices view for AAPL will not reflect the accurate cost basis. However, the aggregate lot in the Prices view (i.e. the main lot for AAPL in your Prices view that can be expanded to see the sub-lots) will show an accurate cost basis. Thus it still “works”, but is just not as clean as it could be.

Vanguard uses a “Shares In” transaction for splits in this manner.

3. No Transaction Recorded

Your brokerage may not record a transaction at all for the AAPL split. In this case, you’ll need to manually account for the split by following the steps in the “Entering a Stock Split” page from our User’s Guide.

4. Using a “Shares Out” Transaction

As un-intuitive as it sounds, some brokerages send a “Shares Out” transaction for the additional number of shares. When StockMarketEye applies the “Shares Out” transaction, it completely removes the AAPL shares from your Prices view. This is obviously not an accurate way of recording the split. See the next section on how to fix this in StockMarketEye.

E-Trade sends a “Shares Out” transaction.

Fixing the Prices View

If your brokerage uses either the “Shares In” or “Shares Out” method, or another way that does not correctly record a “Split” transaction, you can use the following steps to clean-up the situation in your StockMarketEye portfolio.

1. Delete the “Shares In” or “Shares Out” transaction

Go into the “Transactions Report” and select the AAPL transaction that your brokerage recorded for the AAPL split. Then right-click on it, and select the “Delete from transactions…” item from the pop-up menu. Click OK in the confirmation window.

2. Run the “Synchronize Portfolio with Transactions…” feature

Switch back to the Prices view and use the menu: Portfolio -> Synchronize Portfolio with Transactions… This feature is described in the “Synchronize Your Portfolio With Its Transactions” section of the User’s Guide. It will rebuild your Prices view from the Transactions recorded in the Prices view. Afterward, your Prices view should look as it did pre-split.

3. Manually Add the Split Transaction

In your Prices view, select AAPL and the use the menu: Portfolio -> Split Stock… Enter the 7-to-1 split details and click OK. This will record the proper “Split” transaction and your Prices view will be accurate again.

4. Do not use the “Update from brokerage…” feature for the next 5 days

If you use the “Update from brokerage…” feature in the next 5 days, StockMarketEye will re-import and re-apply the “Shares In” or “Shares out” transaction that you deleted in Step 1.

After 5 days, StockMarketEye will no longer import that deleted transaction and you can use the “Update from brokerage…” feature as you normally would.

Conclusion

Hope this helps you manage the AAPL split in your StockMarketEye portfolio. If you have questions or comments, don’t hesitate to contact our support team.