Signing Petition for all VMware folks in broadcom
Please join.
https://chng.it/4SddwpyrF7
4 replies (most recent on top)
It was not a dividend, it was a forced sale of shares. My CPA reclassified the cash out as capital gains and not a dividend.
You're not wrong but you have missed the fact that we have already paid income tax on RSUs and ESPP from previous financial years. What has happened is like someone going back in time and reducing your salary. I can understand why people are so annoyed.
If you had 200 shares of VMware stock at the time of the deal closing, they had a value of roughly $30,000.
Post deal close, 100 shares would’ve been cashed out at $142.5- or $14,250 paid to you.
The other 100 would’ve become 25 shares of AVGO- valued at $24,375 at time of close.
Those 25 AVGO shares have since grown
To over $31k in value.
Option 1) be pi---d over a couple grand in taxes you may not think you owe
Option 2) be thankful that what was originally worth $30,000 to you has now magically turned into about $45,000 in cash / stock value.
Why are people so stuck on the cash consideration paid being classified as a dividend, when it was a dividend? When the same cash consideration / value is paid to ALL share holders proportionate to the stock they owned- = dividend.
Capital gains would require a) cost basis for original stock purchase / casting value for every stock impacted and b) a sale of that stock to service the gain/loss.
In this scenario, there was no stock sale. This is an acquisition/merger exercise where 2 public traded stocks offered the share ration for conversion and cash consideration value.
Why people think their stocks were “sold” or “bought” the same as them offloading some of what they owned is puzzling.
The thing to remember is that the cash was paid out equally per the value agreed on in the acquisition announcement, so it impacted all share holders, and that makes it a dividend, since it was not an individual election to convert or “sell”.
A stock buyback motion allows share holders to opt in or out, and does not impact all shareholders equally. That is not a fair comparison or accurate.