Stock-Micro Focus-2019. HP/HPE Alumni

This page is supplemental information for our "Micro Focus Stock" page -- it you haven't been to Micro Focus Stock already, please start there.

2019. If you owned any MFGP stock on Apr 30, 2019: A hedge fund pressured Micro Focus to sell the profitable SUSE Linux business.

US ADR holders received 0.8296 new MFGP "B" shares (CUSIP 594837403) plus $4.30 cash on May 20, 2019, replacing each original "A" share (CUSIP 594837304.) ($4.35 minus a $0.05 Deutsche Bank fee.) Official Details More Official Details

"Effective April 30, 2019, ADR shareholders will be required on a mandatory basis to surrender their ADRs to DBTCA [Deutsche Bank Trust Company Americas] for cancellation and exchange for 0.8296 new American Depositary Shares (“ADS”) (CUSIP: 594837403) for every 1 old ADS (CUSIP: 594837304). Cancellation fees will not be assessed. Fractional ADSs will not be allocated, in lieu, aggregated fractions will be sold and the net proceeds will be distributed to the entitled ADR shareholders... ADR Payable Date: May 20, 2019." --from the US ADR Corporate Action Notice Notices about this transaction do not appear to have been mailed to US shareholders.

- If you acquired MFGP through the HPE spinoff, and accounted for it as HPE's outside tax counsel recommended in 2017-- therefore paying tax on a theoretical 2017 capital gain -- the cost basis for the new "B" shares would be ($29.34 per "A" share) / (0.8296 "B" per "A") = $35.37 per "B" share. Be sure you note this in your own records (and in your broker's records, if your broker tracks cost basis) -- so that you don't pay tax twice on the same "gain."

2020. The MFGP dividend announced for 2020 was withdrawn at the last minute and not paid: Fidelity reported this correctly. Some brokerages and stock information services did not.

If the 2017 spinoff is treated as HPE's outside tax counsel recommended in 2017:

Back on Apr 30, 2019, US ADR holders received 0.8296 new MFGP "B" shares -- replacing each original "A" share. The cost basis is then
$29.34 / 0.8296 = $35.37 per "B" share. The net loss after the OpenText sale is then $35.37 - $6.43 = $28.94 per "B" share.

For certain quarters, the net loss after the OpenText sale is somewhat higher -- ranging from $29.65 to $34.82 per "B" share. This applies only to MFGP stock derived from these employee stock purchase lots:
5/1/00, 8/1/00, 11/1/00,
10/3/07, 1/2/08, 4/2/08, 10/7/09, 11/1/09, 1/6/10, 4/7/10, and 5/1/10. To download the HPAA's employee stock purchase spreadsheet: https://www.hpalumni.org/StockSpread

Be sure you note this in your own records (and in your broker's records, if your broker tracks cost basis) -- so that you don't pay tax twice on the same "gain."

The HPAA's employee purchase spreadsheets.

- Official quarterly cost basis data for every HP stock purchase from 1959 through 2000 -- with resulting calculated lot-by-lot cost basis for HPQ, Agilent, Keysight, HPE, DXC, Micro Focus "A" shares, Micro Focus "B" shares and sale to OpenText.

- Estimate your average employee-stock cost basis over any span of HP employment from 1959 through 2000 for HPQ, Agilent, Keysight, HPE, DXC, Micro Focus "A" shares, Micro Focus "B" shares.

- Calculate ordinary income/capital gain lot-by-lot from Nov 2000 to Oct 2017 for HPQ, Agilent, Keysight, HPE, DXC, and Micro Focus "A" shares.

To download the HPAA's employee stock purchase spreadsheet: https://www.hpalumni.org/StockSpread

We recommend that you work through your entire HP-related stock situation step-by-step.

HPAA members have developed information and a step-by-step process to find all your HP/HPE-related stock – and estimate cost basis.