Attention, those of you who own XPO Logistics (XPO): XPO has completed a spin-off of a new company, RXO. You will receive one share of RXO for every share that you owned of XPO on the date of record, October 20th, 2022.
Please note: If you did not own shares of XPO on or prior to October 20th, you will not receive shares of the spin-off RXO.
Many clients who received shares of RXO had them called away along with their XPO shares on November 18th. If your shares were called away and your XPO position is now closed, there is no further action needed.
If you still own shares of XPO and RXO in your account, we are recommending that you sell the shares of RXO and use the proceeds to reduce the cost basis of XPO. We recommend waiting until after your other regular trading is completed for this month to perform these actions.
Lattco PRO/AutoPilot Clients: Please sell your shares of RXO after you have completed trading on all of your other positions. Once the shares are sold, please contact us, and we will adjust XPO for you.
After we adjust your XPO position, you will be able to place your normal trades on the position. Keep in mind, we can’t adjust the position until after you sell your shares of RXO.
Basic Lattco:
1) Take the net amount for the sale of the RXO shares, and divide it by the total number of shares that you currently own in XPO; this will give you the cost basis adjustment that you will need for XPO. For example, if you receive $1,000 in net proceeds, and you own 500 shares, you would take $1,000/500 for a cost basis adjustment of $2 per share.
2) Take the cost basis adjustment figure, and subtract it from the price paid for each of your outstanding bundles of shares on the position. For example, if you had a bundle of shares that was purchased for $40 and a cost basis adjustment of $2, you would subtract $2 from $40 to arrive at a new price paid of $38.
3) After you have completed adjusting each bundle of shares, you will
update your band rule worksheets to reflect the adjusted prices.
4) Update your Allocated Cash based off the new adjusted Initial
Purchase Price. Following this, you may resume regular trading of the
position.
Adjustments to Closed Positions: You may need to adjust the calculation for your Profit from Closed Position on XPO if your shares were called away.
Lattco PRO / AutoPilot clients: Please check in your Closed Positions section in your Allocated Cash worksheet to determine the profit shown for the closed XPO position. If it is negative, please let us know and we will adjust the figure.
For basic Lattco clients, you will determine the profit from sale of stock by combining the net amounts received for both RXO and XPO and subtracting the total extended amount that you previously had invested in XPO. You will then combine the profit from sale of stock with option premium earned and subtract your commissions from that total to find the profit from the position.
