How do I enter the Objet merger with Stratasys?

Objet completed its merger with Stratasys on 12/3/2012 for Objet stock. Objet then changed its name to Stratasys.

The information on this FAQ page is based on company filings near the time of the transaction. For more information, please contact the company's investor relations department.


This merger is a simple merger. The information below is based on the information available from the DEFM14A filed with the SEC. Price information is from websites offering historical prices. Due to the nature of the merger and the name change of Objet to Stratasys, the merger screen is not needed to account for this merger. Depending on the details of the (old) Stratasys shareholders, no entries may be needed -or- up to 3 entries may be needed. The opening price of the new Stratasys shares on 12/3/2012 was $76.00.

 

The structure of the merger means shareholders will realize gain if the cost basis of their (old) Stratasys shares were less than $76.00 per share.

 

The cost basis of each block of (old) Stratasys shares will need to be examined to see if there is a capital gain to report.

 

If all blocks have a cost basis greater than $76.00, (all have unrealized losses) then nothing is needed to be entered.

 

If at least some blocks have a (so-far) unrealized gain, the gain must be realized and then the cost basis of the new Stratasys shares increased. This is accomplished by entering a capital gain distribution and then a Return of Capital distribution. The capital gain will be a positive number, the return of capital will be the same size as the capital gain but negative.

Calculate the Capital Gain

 

If the club made only one purchase of Stratasys:

  • Generate the Security Transaction History report for Stratasys.
  • Confirm there is only one block of shares.
  • Find the Total Cost Basis column on the far right of the report. Find the last entry for this column. This is the current cost basis of Stratasys shares. The reportable capital gain for this merger is:
    • [76 x (# of Stratasys shares)] (total cost basis of the Stratasys shares).
  • If this number is negative, meaning you would realize a loss if the shares were sold at $76/share, then you can stop, you do not need to enter anything for this merger.

 

If the club made multiple purchases of Stratasys, there are at least 2 ways to get the per block cost basis information.

 

Method 1.

  • Enter a Sell transaction for all shares of Stratasys for a total consideration of [76 x (#of Stratasys shares)]. Ex: For 100 shares you would enter a total of 7600.
  • Generate a Club Capital Gains Report.
  • Record the gains from each block of Stratasys including the amount and whether it is a long-term or short-term gain. All this information will be included in the report.
    Delete the Sell transaction.

Method 2.

  • Start a Sell transaction for less than all shares of Stratasys. The total proceeds do not matter. When selling a partial position the program will display a block selection screen. This screen will list all blocks, the start of their holding period, the number of shares in the block and the total cost basis for that block.
  • Cancel the Sell transaction.
  • Manually calculate the gain from each block if it were sold for 76.00 per share.


For both methods, add all the long-term gains and all the short-term gains adding the amounts only from blocks with a gain. Keep the long-term and short-term gains separate. DO NOT include any blocks that have a loss in these calculations.

 


Enter the Capital Gain
In the accounting software, go to Transactions > Dividend or Distribution in CA3 or Accounting > Securities > Cash Dividends in myiclub.com. Below is the information needed to make this entry.

Date: 12/3/2012
Amount: Use the amount from your short-term capital gain calculation above.
Type: Short-term capital gain
Security: Stratasys
Ignore this if you have no short-term capital gains

Repeat this for the long-term capital gains.
Date: 12/3/2012
Amount: Use the amount from your long-term capital gain calculation above.
Type: Long-term capital gain
Security: Stratasys
Ignore this if you have no long-term capital gains.

Enter the Return of Capital
In the accounting software, go to Transactions > Dividend or Distribution in CA3 or Accounting > Securities > Cash Dividends in myiclub.com. Below is the information needed to make this entry.

Date: 12/3/2012
Amount: - (long-term gain entered + short-term gain entered). Add the 2 types of capital gain and enter the negative of this sum.
Type: Return of Capital
Security: Stratasys

The return of capital transaction will balance your cash account and increase the cost basis of the new Stratasys shares by the amount of the gain reported. The account you use for these transactions is not important. However, be sure to use the same account for all the capital gain and return of capital transactions.