UP or down as usual, its relative to market sentiment as it was...

UP or down as usual, its relative to market sentiment as it was before.

This information might help some.

"Assuming you are holding 100,000 shares. A 5:1 share consolidation means, for every 5 shares you own it will be reduced to 1. In this example, you can expect to see your shareholding become 20,000 after the consolidation(100,000 / 5).

How Does It Affect You As A Shareholder? Is that a bad thing? You paid to buy 100,00 shares and now the company reduces your shareholdings – are they playing game on you? No, it’s not. It has no negative impact on your end. Share consolidation reduces ALL the shares held by the shareholders and when every shareholders get affected no one loses out.

No doubt the number of your shares is lesser, but the percentage ownership and value of your investment remain the same.

Let’s go back to the 5:1 consolidation example mentioned above. When the shares consolidate, your number of shares become lesser (divide by 5) but your price per share becomes higher (multiply by 5). This has a net neutral effect on your investment.

Anything you need to do?

Actually, nothing much. The company will send you a letter to pass a resolution on a AGM/EGM. After the consolidation takes place, a new stock quote is given, the shares price become higher and your shareholding becomes lesser.

Do note that your broker would not correctly reflect the number of shares you have after the consolidation. Rather, it will show on your CDP statement "


Imo Dyor