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Trent Stock Falls 30% on Ex-Bonus Day
4 Jun
Summary
- Trent's share price saw a significant drop on June 4th.
- The stock fell due to turning ex-bonus on its record date.
- The 1:2 bonus ratio impacted the share price discovery.
Trent's stock price experienced a dramatic fall on Thursday, June 4th, plummeting by nearly 30%. The significant drop occurred as the Tata Group retailer's shares turned ex-bonus on their record date. Previously closing at Rs 4,240, the stock was trading around Rs 2,790 per share.
This substantial price change is a direct result of a corporate action: a bonus issue in the ratio of 1:2. The record date for this bonus issue was June 4th. Consequently, the stock began trading at its ex-bonus price, reflecting the increased number of shares outstanding.
While the share price appeared to decrease significantly, investors' wealth has not been eroded. The company's overall market capitalization remains stable. This phenomenon occurs because the bonus shares increase the total count of shares, leading to a lower price per share, though the total value held by shareholders is maintained.
