Thursday, April 28, 2016

Stock Dividend: Under Armour (UA, UA.C) - UPDATE

UPDATE - 4/28/16

I wanted to quickly follow up on a previous post from April 12th related to Under Armour's Stock dividend on April 8th.  You can find my previous post here.  As I mentioned it was a stock dividend that had the same effect as a 2:1 stock split.  At the time, I was hoping to sell my newly acquired UA.C shares while it was trading at the same price as the UA shares.  Unfortunately, as I write this it is a little late as the UA shares are trading higher than the UA.C shares.

I wanted to write an update post as I was able to figure out what the cost basis would be for the newly distributed UA.C shares. It can be found through an IRS Filing.  It shows IRS Form 8937 which is used by an organization to report an action which affects the stock basis for holders of a security.  UA has posted this filing on there website. From the filing you can see that each share will have the following cost basis:

  • UA - $43.95
  • UA.C - $42.84

To see a detailed calculation of how these amounts were decided see Part II Line 16 of the filing.  I just wanted to share this as it is not something we see too often, but it was interesting to see discover how the costs basis is determined for a stock dividend.  I wanted to know my cost basis as I hope to trim my UA position and invest it in dividend stocks that have higher yields than the ones I am currently invested in.  Hope you learned something from this post too!

If you want to find additional information on this stock distribution please go to the Under Armour Class C Stock Information page.

Full Disclosure: Long UA

Have you ever looked at IRS Form 8937 before?  What other filings do you look at besides the 10-K and 10-Q?

I'm not an investment professional or a licensed financial advisor. This blog represents my personal views and decisions, which may not be appropriate for other investors. Please use common sense or consult with an investment professional before investing your money. I am not responsible for the outcomes of your decisions, nor am I responsible for the comments posted by readers or the contents of any linked websites. This blog should viewed for educational or entertainment purposes only.

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