01/20/2021 – Concho Resources Inc. (CXO)

  by Robert Brauer

Attention, those of you who own Concho Resources Inc. (CXO): CXO has been acquired by ConocoPhillips (COP). The acquisition was concluded on 1/19/2021 and includes an exchange of 1.46 shares of COP for every outstanding share of CXO. Because of this acquisition, you should sell your shares of COP and transmogrify if necessary.

When selling your COP shares, you will need to take the following steps:

  1. After selling COP, take the net proceeds from the sale and divide it by the number of shares you previously owned of CXO. This will help you determine the price that CXO was effectively sold for.
  2. If the price you calculated in step #1 is lower than your average cost for CXO, you will proceed with the transmogrification, and use the price from step #1 as your Price of Old Stock for your transmogrification search. If the price calculated in step #1 is above your average cost for CXO, there is no need to transmogrify.

We’re here to help! Here is a link to the Transmogrification document that will tell you step-by-step what to do.

SPECIAL NOTE: Lattco PRO and Lattco AutoPilot accounts will likely display an analyzer error after downloading the activity for the removal of CXO. If this is the case, please contact us, and we will correct the error and close out the CXO position.

Lattco PRO clientsPlease use this link to access the transmogrification document for your accounts. Also, please give us a call after you have purchased shares for your new position, and before you sell your options; we will need to make some adjustments to your account to properly reflect the transmogrification.

Lattco AutoPilot clients:  At this time, trading screens for Transmogrification are not included in the AutoPilot system.  You will need to log into Ally to place three orders to complete the Transmogrification process:

  1. Sell your existing shares of COP and determine if you need to transmogrify, as instructed above
  2. Buy the same amount of shares for your new stock that you previously owned of CXO prior to the acquisition
  3. Sell to Open a put at the top of the lower band to replace the purchase for the current month if you don’t own 10x your Level

Once this is complete please notify us and we will adjust your AutoPilot account so that it can suggest the appropriate call option orders.

If you have any questions, please don’t hesitate to contact us at support@snideradvisors.com or 1-888-6-SNIDER. We’ll be happy to walk you through the process.

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