β#ForexChief #StockTrading #stock #SplitShares #Consolidation #AdditionalEmission #MergerOfCompanies β
π‘ Corporate events: split, issue, reorganizationβ
π We conclude a review of the factors that can affect the stock price.
β
Split sharesThis is the legal process of dividing a stock into several parts. The company's capitalization does not change, but the number of shares is increasing. This increases liquidity on exchange and attracts capital: the cheaper shares, the more private investors will be able to buy them. A split means a confident financial condition of company, but has little effect on the quarterly profit of investors. Nevertheless, after split, speculators are actively buying such shares, as they expect a rapid rise in prices.
β
ConsolidationA reverse split is the merger of several shares of one company into one or the takeover of smaller companies by large corporations. Quite a rare occurrence in the stock market, which means that either the company is not doing very well. A reverse split lowers investor confidence.
β
Additional emissionThe additional issue of shares attracts new capital to pay off debts or solve other financial problems. But positive processes are also possible: company can issue an additional block of shares to diversify production or implement new projects. At the same time, earnings per share are reduced.
β
Merger of companiesThis is a combination of several companies and all the assets on their balance sheet. As a result, a new corporation appears on the market, which is the legal successor of all participants in process. The consumer receives a product or service of high quality or innovative technologies. The price of new shares is growing rapidly.
β
Π‘orporate events calendar is usually planned one year in advance, or at least several months in advance. If you are a shareholder of a company, then you must be notified personally, but you can always find up-to-date information on the websites of companies and in open sources.
β
Profits to yβall!