Sometimes companies will announce a stock split or stock consolidation. They might do this to make each share more affordable for the retail investor. Consolidations are most commonly used when a company's share price has fallen, and it wants to prevent a delisting of its shares or attract more investors.
Remember that the Portfolio Manager won't reflect changes like this automatically. It will simply track the share price and reflect it against the information you've entered.
Let's use the example of iShares Core S&P 500 ETF (ASX:IVV) when the stock had a 15-for-1 stock split. This meant for every 1 share of IVV you held (around $595 before the split) you received an additional 14 IVV shares (roughly $39 a share). This means that the one share was split into fifteen:
$595/15 = $39 per share
It's important to note that the overall value of your holding doesn't change.
How to make this change in the Portfolio Manager
First, it is recommended to use the information provided by your share broker or share registry for the most accurate details.
You can see below at (1) that my original purchase price per share was $357.35. At (2), my shares had the quantity of 5. The value of my purchase is at (3). The price today (4) is $38.87 a share. My dividends received so far are at (6). Because I've not reflected the stock split, my Profit/Loss at (7) is now incorrect.
This is easily fixed.
I've checked my share broker statement or communication, and it shows that on 6 December 2022, the stock was split, and I received 14 additional IVV shares. I now have 75 IVV because of the 15-for-1 stock split (5 x 15 = 75).
In the Portfolio Manager tool, I need to close my original position but not register a capital profit or loss. I have received dividends in this example, so I want to ensure they're recorded.
I can record a sale in the Portfolio Manager and use the original purchase price and quantity.
When recording the sale, I'll enter 5 as the quantity (1), the sale date is the date the stock split occurred (2), the original purchase price as the Sale Price (3), and then Record the sales details at (4).
At the bottom of my list, I'll have a Record of Sales area that shows my sales.
My sale price is shown at (1), my buy price of this sale is at (2), my profit/loss capital is $0 at (3), and my dividends have been recorded as $152.28 at (4). Perfect!
Now, I need to enter the holding back into the Portfolio Manager with the new details. At the top of the list, go to Record a Purchase (1).
l'll enter the same ticker/stock/ETF code at (1), and then the date of the stock split at (2). At (3) my new issue price is $23.8233 ($357.35/15). My new quantity is at (4), which is 75 (5 x 15). My total cost is shown at (5), and it's the same as my original cost, along with the sale proceeds which I did earlier. Don't forget to click save (6).
Voila! My position now reflects my actual holding. (1) shows the new purchase price because of the split, and (2) has my new quantity. (4) shows today's share/unit price, and (5) accurately reflects my running capital gain/loss. My dividends have been taken and are now recorded in the sale area, so this will show $0 until I receive a new dividend.
For a stock consolidation, the opposite applies. You'll multiply the purchase price and divide the share quantity.