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Cash after acquisitions

I had understood that cash is added back to the portfolio balance during backtesting if mergers and acquisitions result in delisting of the stock and a cash equivalent distribution. In the attached backtest, however, I don't see cash added back to the portfolio after WYE was acquired by Pfizer on Oct 15 2009. There should be about $50 per WYE share back in my portfolio based on this: http://www.pfizer.com/files/investors/Pfizer_Wyeth_FAQ.pdf

Am I missing something?

Also, not exactly sure what happens if the merger/acquisition results in a stock swap. e.g. I remember trying Sun Micro shares (JAVA) and I don't remember ORCL stock put back in my portfolio. Any guidance here would be helpful. Thanks

Clone Algorithm
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Backtest from to with initial capital
Total Returns
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Alpha
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Beta
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Sharpe
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Sortino
--
Max Drawdown
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Benchmark Returns
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Volatility
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Returns 1 Month 3 Month 6 Month 12 Month
Alpha 1 Month 3 Month 6 Month 12 Month
Beta 1 Month 3 Month 6 Month 12 Month
Sharpe 1 Month 3 Month 6 Month 12 Month
Sortino 1 Month 3 Month 6 Month 12 Month
Volatility 1 Month 3 Month 6 Month 12 Month
Max Drawdown 1 Month 3 Month 6 Month 12 Month
import random
import numpy as np
import pandas as pd
import pytz
import time
import datetime

def initialize(context):
    context.stock = sid(23555)

def handle_data(context, data):
    
    if not context.portfolio.positions:
        order_target_percent(context.stock,1)
There was a runtime error.
1 response

Hi Sekuri,

Mergers and acquisitions can come in a variety of flavors. At the moment, we don't handle all of them gracefully. In this scenario, we only compute the stock ratio adjustments in your portfolio and ignore the cash transaction.

In general, if its a straight merger with only stock transacted between company A and company B, your stock positions get re-evaluated in your portfolio according to the new terms. The old stock will persist in your universe, but will be static with no pricing updates. The new stock will continue to receive trade data.

Best,
Alisa

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