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I saw an announcement that some Fidelity funds (FMAGX, FDGRX, FCNTX and others) will do a 10-for-1 split. The target date for the split was June 8, but that has come and gone and the share price has not split. Does anyone know the correct date for this split? Thx!
Nice find. Though it sounds more like speculation ("probably because of technical difficulties") than hard facts.
If we're going to play the guessing game, I'd go with a variant of their secondary speculation: "the complete lack of notification to fund shareholders on the first go-around!"
Given that so many people have trouble understanding how share prices move when there are the usual distributions, Fidelity likely saw a load of customers freaking out when the first split occurred. Fidelity may have reconsidered the second round of splits as a consequence.
This hypothesis is bolstered by the fact that the (retail) explanation page cited by Ted is a pdf created May 31st. That was almost three weeks after the split; the timing suggests an unexpected necessary response to investors' concerns. (The institutional page Shadow cited was created earlier, on the date of the first split.)
Fidelity Monitor did go a bit overboard in stating that this split was unprecedented. I've given examples elsewhere of fund splits by other companies. But fund splits aren't unprecedented even for Fidelity. On June 21, 1996, Fidelity Destiny II (FDETX) split 3-1.
The explanation pages offered by Fidelity leave open the question of how rounding is handled. They give the example of FOCPX, where a share worth $113.18 is split into (exactly?) 10 shares worth $11.32 each. Either the split is not exactly 10-1 (and the explanation is incomplete), or shareholders might gain (or lose) value on the rounding.
It might be that Fidelity was going to do an exact 10-1 split and make up any rounding shortfalls. But then Fidelity found on June 8 (the planned split date), the cost was too high due to the way the roundings came out. It's as good a guess as anything else
At least the newsletter gave us some possibilities as to why the remaining splits have not occurred. It is more information than we received from Fidelity.
Comments
Regards,
Ted
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/mutual-funds/mf-share-splits_apr2018.pdf
I saw several remaining funds were due to split June 8 and still have not split. Here is the Fido webpage:
https://sponsor.fidelity.com/pspublic/pca/psw/public/library/designbenefits/Fidelity_funds_undergo_share_splits.html
or PDF
https://institutional.fidelity.com/app/proxy/content?literatureURL=/9882849.PDF
Not sure why the remaining splits have not occurred.
Found this article this morning.
https://www.fmandi.com/reports/Special-fund_share_split.pdf
If we're going to play the guessing game, I'd go with a variant of their secondary speculation: "the complete lack of notification to fund shareholders on the first go-around!"
Given that so many people have trouble understanding how share prices move when there are the usual distributions, Fidelity likely saw a load of customers freaking out when the first split occurred. Fidelity may have reconsidered the second round of splits as a consequence.
This hypothesis is bolstered by the fact that the (retail) explanation page cited by Ted is a pdf created May 31st. That was almost three weeks after the split; the timing suggests an unexpected necessary response to investors' concerns. (The institutional page Shadow cited was created earlier, on the date of the first split.)
Fidelity Monitor did go a bit overboard in stating that this split was unprecedented. I've given examples elsewhere of fund splits by other companies. But fund splits aren't unprecedented even for Fidelity. On June 21, 1996, Fidelity Destiny II (FDETX) split 3-1.
https://www.sec.gov/Archives/edgar/data/35331/0000035315-96-000019.txt
The explanation pages offered by Fidelity leave open the question of how rounding is handled. They give the example of FOCPX, where a share worth $113.18 is split into (exactly?) 10 shares worth $11.32 each. Either the split is not exactly 10-1 (and the explanation is incomplete), or shareholders might gain (or lose) value on the rounding.
It might be that Fidelity was going to do an exact 10-1 split and make up any rounding shortfalls. But then Fidelity found on June 8 (the planned split date), the cost was too high due to the way the roundings came out. It's as good a guess as anything else
At least the newsletter gave us some possibilities as to why the remaining splits have not occurred. It is more information than we received from Fidelity.