How To Handle Uneven Stock Splits
Decimal Split Ratio
StockMarketEye can only handle whole numbers in the stock split ratio.
However, if your stock split ratio is something like 1 for 0.774 - that is, it contains a decimal number in the ratio - you can multiply the numbers by a power of 10 to get both sides of the ratio to a whole number.
For example, for a split such as 1 for 0.774, you would enter the ratio, 1000 for 774. For a split like, 3 for 4.5, you would enter the ratio, 30 for 45.
Uneven Shares After Split
Depending on the stock split ratio, both forward stock splits and reverse stock splits can produce an uneven number of shares.
For example, say you have 300 shares of a stock and the stock splits 1 for 0.774. This would result in 232.2 shares after the stock split.
The question then is what happens to the resulting fractional shares - in our example, the 0.2 shares?
Brokerages will handle the fractional number of shares in 3 possible ways:
- Award you all of the new shares, including any fractional portion. In our example above, you would receive 232.2 shares. This is the simplest form to enter into StockMarketEye - just enter the split transaction as described above.
- Award you a whole number of shares and sell the fractional amount for cash. In our example above, you would receive 232 shares, plus cash for the 0.2 fractional share portion. In StockMarketEye, you would enter the split transaction as above so that you end up with 232.2 shares. Then enter a "Sell" transaction for the 0.2 shares, so that your final share count is 232.
- Award you a whole number of shares and throw away the fractional shares. This is a less common way of handling an uneven split. In our example above, you would receive only 232 shares. The 0.2 fractional share portion would be discarded. In StockMarketEye, you would enter the split transaction above so that you end up with 232.2 shares. Then enter a "Shares Out" transaction for the 0.2 shares, so that your cash balance does not change and your final share count is 232.