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HPI/HPE Split -- Stock

(For more on the HPI/HPE split -- summary, employment restrictions, LinkedIn, retiree benefits: The Split)
(Updated July 10, 2016)

Stock. Each stockholder received one share of Hewlett Packard Enterprise stock (new stock symbol HPE) for each share of HP (unchanged stock symbol HPQ.) Stockholders received cash in lieu of fractional shares. Stockholders did not need to take any action. 

- US and Canada: Tax-free. HP Inc. Separation FAQs   US Stock Cost Basis Allocation Filing  

- Germany: Discussion in an online stock forum: Wall Street Online (Germany)

- Other countries: HP websites in other countries link to the US investor information. HP Inc Offices Worldwide HP Inc Corporate Headquarters.  HPAA's directory of professional and social groups worldwide.

Stock price comparison graph:   (Click "Comparison" and enter 'HPQ")


- Former HPQ quarterly dividend was most recently $0.176/share

- Post-split HPQ $0.124/share

- HPE $0.055/share

(Total has been raised from $0.176 to $0.179.)

To receive investor email alerts:
- HPQ: http://h30261.www3.hp.com/site-services/email-alerts/corporate-alerts.aspx 
- HPE: http://investors.hpe.com/site-services/email-alerts

Stock Options and SARs.

1. SEC filing: "Each award of HP Co. stock options or SARs held by an individual who will be an employee of HP Inc. following the separation, or who is a former employee of HP Co. as of the separation, will continue to relate to HP Inc. common stock, provided that the exercise price of, and number of shares subject to, each such award will be adjusted in a manner intended to preserve the aggregate intrinsic value of the original HP Co. award as measured immediately before and immediately after the separation. Such adjusted award will otherwise to subject to the same terms and conditions that applied to the original HP Co. award immediately prior to the separation, except that, for each such award of stock options that are performance-contingent stock options, the performance requirements will be adjusted in a manner that preserves the original ratio of stock price hurdle to exercise price."  Options and SARs for those who will be an HPE employee after the separation will be similarly adjusted and converted into HPE options and SARs. HPE SEC filing  [Document page 154. Condensed and boldface emphasis added.]

2. Official HP public page on Employee Stock Purchase Plans (ESPP), Share Ownership Plan (SOP), Compaq ESPP, EDS ESPP, Performance-based Restricted Units, Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, and Stock Options: https://content.ext.hp.com/sites/CountrySupport/Global_Total_Rewards.page

Cost basis  

The page "Separation FAQ’s, including Stock Cost Basis Allocation" on the HPQ website
now has a link to the letter that stockholders will receive:

"Important U.S. Federal Income Tax Information for Shareholders Concerning the Hewlett Packard Enterprise Company Common Stock Distribution 
November 11, 2015...

"...U.S. federal income tax laws do not specify how to determine fair market value...

"This example assumes you choose to use the average opening-closing trading price on November 2, 2015, as the method of determining the fair market values of the HP Co. common stock and the Hewlett Packard Enterprise common stock. Using this method, after the Distribution, the fair market value of a share of HP Co. common stock was $13.15 and the fair market value of a share of Hewlett Packard Enterprise common stock was $14.74. Based on these relative fair market values, your basis in your HP Co. common stock would be apportioned 47.15% to your HP Co. stock and 52.85% to your Hewlett Packard Enterprise common stock."

[The letter then goes on to include a detailed sample calculation.]

http://h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/others/form-8937-111115.pdf    [Posted on November 13, 2015; boldface added]

A member reports...

"Charles Schwab allocated cost basis between HPI and HPE as recommended by the HP SEC filing, i.e.
47.15% to HP Co. and 52.85% to HPE.

"Fidelity, which handles the ESPP, instead used
48.835% to HP Co. and 51.165% to HPE."

Fidelity has sent two 1099 forms for ESPP:

"...the first 1099 I was sent in early 2016 showed a single transaction with the entire fractional share handled in a single transaction.

"...in early July 2016 Fidelity sent a corrected 1099 with 20+ transactions... Fidelity spread the sale of fractional shares needed to fund the cash in lieu for HPE across nearly every single lot purchased in the ESPP since 2001. The sales were for such small amounts that both the Fidelity web site and the Form 1099 show transactions with 0.000 shares with a cost basis of $0.00 and proceeds of $0.00."

Comments and further info: info@hpalumni.org

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