9/11/2017-Swift Transportation Company (SWFT)

  by Robert Brauer

Attention, those of you who own Swift Transportation Company (SWFT):  SWFT has announced a merger with Knight Transportation, Inc. (KNX), and a resultant reverse stock split. All shareholders of SWFT will receive 72 shares of KNX for every 100 shares currently owned of SWFT. Because of this merger, you should sell the shares of KNX on Trade Day, and transmogrify if necessary. If your shares are assigned at expiration and called away, there is no need to transmogrify.

Additionally, if your shares are not assigned, you may be able to sell them at a price that is above your average cost. To determine if this is feasible, sell the shares of KNX in the market. Multiply 72 by the price you were paid for KNX, to determine the proceeds of the sale. Take this number, and divide it by 100. This will provide you with the comparable price that you would have sold the shares of SWFT at if the merger had never occurred. If this price is above the average cost that you originally paid for your SWFT shares, you may close the position out, and you will not need to transmogrify.

If the price you sell the KNX shares for is not above the average price for SWFT, you will 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.

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 your 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 TradeKing to place three orders to complete the Transmogrification process:

  1. Sell your existing shares
  2. Buy the same amount of shares for your new stock
  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.

Finally, please note that the merger / reverse split activity may cause an Activity Analyzer error to appear in your account the next time you update the activity. If this is the case, please do not hesitate to contact us, and we will attempt to rectify the issue.

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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