The Split/Reverse Split Wizard is designed to help you create the necessary transactions to accommodate a stock split or reverse split.
A stock split is a corporate action that increases the number of shares of stock while decreasing the price per share of that stock.
For example: With a 2 for 1 stock split, you will own 2 shares after the split for every 1 share you owned before the split. The price of each share is reduced by half. If pre-split you owned 50 shares, then post-split you will own 100 shares. Also, if the pre-split price was $10.00 per share, then the post-split price will now be $5.00 per share.
A reverse stock split is a corporate action that reduces the number of shares while increasing the price per share of that stock.
For example: With a 1 for 2 stock split, you will own 1 share after the split for every 2 shares you owned before the split but the price of the share will be doubled. If pre-split you owned 50 shares, then post-split you will own 25 shares. Also, if the pre-split price was $10.00 per share, then the post-split price will now be $20.00 per share.
The split wizard can be launched from two areas of the system; either the Import Sources grid or the import blotter screen.
To access this feature from the main menu, click Import from the top toolbar.
From either the Import Sources grid, or the import blotter screen, click Corporate Action Warehouse from the top menu.
Click Corporate Action Wizard from the top menu and the Select a wizard to run dialog opens.
To access this feature from the main menu, click Import from the top toolbar.
From either the Import Sources grid, or the import blotter screen, click Corporate Action Warehouse from the top menu.
Select Split/Reverse Split Wizard and click OK. The fields within the wizard are described below.
On this screen, you will enter the information for the split security, the date of the split, split ratio, and determine how you fractional shares are handled.
In the Security Name or Symbol/CUSIP field, click the magnifying glass icon. The Find Securities dialog opens.
Select the security and click OK. You are returned to the wizard.
Click the Effective Date drop-down. A calendar appears. Select the date the split or reverse split takes effect. Note: The date of the split transaction must correlate to the date that the price changed (increase/decrease). The price change date may differ depending on whether Morningstar pricing or imported pricing is being used.
Enter the Split Ratio used to determine the number of new shares. This ratio is normally provided by the custodian or can be researched on the Internet. For example, if you had a 1 for 2 reverse stock split, you enter.5 in this field.
In the Are you receiving cash in lieu of fractional shares? field, click the Yes or No radio button. Click here 
for more information on Cash-in-Lieu transactions.
If you selected Yes, in the Cash in Lieu Price field, enter the amount of cash received. If you do not have the Cash in Lieu price, Morningstar recommends entering 0 and the sell transactions will be generated on the Cash in Lieu blotter with a red warning. To correct the transactions, refer to the Cash in Lieu transactions you exported prior to deleting them to retrieve the Net Amount. Morningstar recommends updating the Net Amount column rather than the Price column to avoid rounding issues. If the price is added and the calculated Net Amount value (Number of Shares x Price) results in a value with more than two digits after the decimal (18.756 instead of 18.76), this could result in incorrect values in the Cash account. After entering the net amount in both the Sell and Deposit fields, click Save to have the system complete the transaction.
If you selected No, the option changes to Fractional Shares and you must select how you want to handle the fractional shares. If Fractions is selected, the system retains the exact number of whole and fractional shares created through the spin-off. If Dropped is selected, only whole shares are retained and the fractional shares are ignored. If Rounded is selected, and the fractional share is .50 or greater, the system rounds up to the next whole share; if less than .50, the system rounds down to the closest whole share.
Click Next.
On this screen, you will select the accounts to which the split transactions should be generated.
Click the Import Source drop-down and select the custodian from which you import accounts.
The All Accounts radio button is selected by default.
If you do not want to select all accounts, check the Select Accounts radio button and click the magnifying glass icon. The Find Accounts dialog opens.
Select the account(s) and click OK.
Click Next to generate the transactions. You are taken to the Corporate Actions Blotter where you can review the transactions.
See Also