Undoing stock splits

Hi,

I’m building The Geospatial Index, a project to track every publicly traded business in the industry of my profession. Importantly, the successes AND failures to avoid survivorship bias.

This is to check things like whether the growth rate of the index outpaces that of my salary, and to keep me informed and inspired.

I have run into a problem caused by stock splits. For example, Autodesk listed on 28/6/1985 for what their own historical price lookup says was $0.5. There have, however, been two 2:1 splits. The IPO price was therefore not 0.5, but in fact 0.522=2? So basically, to account for the effect of splits, I multiply them together to get the overall split multiplier, in this case 4, then multiply the split adjusted IPO price by that to reverse all the splits? In this case that’s $2.

I see that Sharesight has historical prices back 22 years to 2000, right? Therefore I can use the Share Checker to get some of the correct IPO (close of day) prices. It’s harder with businesses from the 1980s though.

Another example is Oracle. Sharesight only has sight of 2 splits, in 2000, but in fact there have been ten. Their website helpfully tells us the $15 IPO price. I also note that the split adjusted IPO price is $0.06. 15/0.06=250 stock split multiplier. Therefore I’ll need put an IPO price of $15 then manually input the 8 extra splits before 2000 that Sharesight can’t see. As shown at the above link though for Oracle, the splits multiply to 324, not 260. What am I going wrong?

I see that a way to get around all this is just to delete all the splits that Sharesight inserts.

I think in this scenario that’s a good enough solution because I don’t have the resources to discover the true IPO price of all stocks from years ago.

I am also not particularly interested in the history of splits for each. I only want to see the CAGR per stock and for the portfolio.

Thoughts?

Thinking about this further, however, I can see how such an approach would result in my portfolio no longer being equal weighted if I just delete all the stock splits from Sharesight and go with the split adjusted IPO price. This is because different stocks will have different splits, so the IPO price will be adjusted by a different ratio. Therefore I have a big job on my hands.