Attention, those of you who own Gannett Co., Inc. (GCI): GCI has announced a spin-off for the company, the details of which can be found here. The spin-off involves the creation of a new GCI, and a symbol change of the pre-existing GCI to TGNA. All owners of the TGNA position will receive a quantity of shares in the new GCI position equal to half of their ownership of TGNA (i.e. owners of 100 shares of TGNA will receive 50 shares of new GCI). Please note that these new shares will be in addition to those shares you already own, and not a replacement for them (i.e. if you previously owned 100 shares of GCI, you will now own 150 shares of TGNA and new GCI combined).
Any options that you may currently have open on the old GCI will be applied to the TGNA position and the new GCI. If your options are exercised, both the TGNA and GCI shares will be sold. The current market price for your positions can be determined by adding the total market price for TGNA to 50% of the market price of GCI. For example, if TGNA is trading at $35 and GCI is trading at $10, you would add $35 and $5 to get a market price of $40 for the total position.
At this time, it appears that our clients who are holding GCI as an open position should have in-the-money options. Given the current market price for TGNA and the new GCI, it appears probable that the options that are open for GCI will be exercised for most of our clients, and the positions closed as a result. If this situation should occur, no action will be necessary on your part; your shares will be called away, you will record your profit on the position, and then generate a new position as usual.
It is possible that the situation may change, and the options are not exercised; if this should happen, we will determine the course of action to take with regards to the position moving forward. The situation will be clearer following option expiration on Friday; we would therefore recommend that you check this post again on Monday Trade Day, in case any updates have been added.
At this time, we would recommend that you check your brokerage account prior to beginning your trading on Monday morning. If the calls on the position have been exercised, then the shares will have been removed. If the shares are still present, then the options expired without being exercised, and you will need to contact us to determine your next course of action.
We’re here to help! If you have any questions on the GCI spin-off, please contact us at 1-888-676-4337 or support@snideradvisors.com.
