Data: VOD (vodafone)
Author: Cone
Creation Date: 2/24/2014 2:46 PM
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Cone

#1
If you're trading VOD, you may have been caught off-guard by the corporate actions today. Later this week, I'll suggest an adjustment (manual split) to the data to remove the effect of the gap.

According to stockcharts.com, VOD went "ex" with a 6:11 reverse split after paying a $17.3601 cash dividend today. ft.com has the finer details in this article, whose contents I'll copy here for convenience.

QUOTE:
Vodafone shares rose slightly after the mobile phone group completed the disposal of its stake in Verizon Wireless.javascript:showEditForumPost(179134);
Shareholders will receive 0.0263001 shares in Verizon Communications, a New York-listed telecoms group, for each Vodafone share held. Additionally, the group reduced its share capital by issuing six new shares for every 11 old ones held.

An individual with 1,000 old shares will receive 26 Verizon shares and 545 new Vodafone shares, plus £300 in cash in early March. A separate payment of about $14 would be made to represent the fractional entitlement to Verizon stock.
Here’s how the calculation works:
Return of value:
Return of 30p a share x 1,000 shares = £300 (the exact figure will depend on the sterling-dollar exchange rate next week)
0.0263001 Verizon Comms shares per Vodafone share x 1,000 = 26.3001 Verizon shares. Rounded down to 26
Share consolidation:
(1,000 ÷ 11) x 6 = 545.45 new Vodafone shares. Rounded down to 545
In this example, the fractional entitlement to 0.3001 Verizon shares (about $14 or £8.40) would be paid, on about March 10.
The fractional entitlement to 0.45 new Vodafone shares would be donated to charity, as it is less than £3.
Those who hold Vodafone shares in certificated form can sell their Verizon entitlements free of charge until April 4, via a dealing facility that aggregates holdings and transacts once a day.
Investors who retain Verizon shares can expect to receive a quarterly dividend in early May, which will be paid in dollars and subject to a US federal withholding tax unless the shares are held in a Sipp. The tax can be reduced by completing form W8-BEN, which most stockbrokers will supply.
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Cone

#2
This is interesting because Yahoo! has not included either the split or dividend in its data.

For Fidelity data, it appears that if you just enter a 11:6 manual split for 2/21/2014 (to reverse the reverse split), the continuity of the data series is preserved. Note however that the effect of the dividend would show up (erroneously) in a backtest if you have enabled "Apply Dividends" in Preferences > Backtest settings

It's never easy.
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Cone

#3
By observing data history from several providers other than Fidelity, the VOD ADR shares were not split. Any windfall from the VOD - VZ demerger was realized in the gain in U.S. ADR share price. Shares of VOD in London (VOD.L on Yahoo!) are a different story.

From what I read, the 1 VOD ADR share represents 1/10 of a VOD plc share, which seems to indicate that the ADR shares should effectively be split, but it seems that the effect of the split and cash distributions are "reinvested" and reflected in the ADR shares.

Fidelity probably needs to remove that 6:11 split action, but you can reverse it by right clicking the chart manually "Process a Stock Split". Enter a 11 for 6 split for 2/21/2014.
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