Bonus issue alert: Did Cupid shares really crash 80%? Here's why you should ignore the massive plunge
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Shares of Cupid Limited adjusted for a bonus issue on Monday and appeared to have crashed nearly 80% in a single day. In reality, the stock rose more than 15%, even as the broader stock market declined. After closing at Rs 402.20 apiece on Friday, the condom-maker’s shares opened at Rs 82 on Monday after turning ex-record date for the bonus issue. The stock later rallied more than 15% to Rs 92.90. Earlier in January, Cupid said its board of directors had approved the issue of bonus shares in the ratio of 4:1. The company had set March 9 as the record date to determine the eligibility of shareholders to receive the bonus shares. What does this mean for shareholders? If a shareholder owns one share of a company worth Rs 100, a 4:1 bonus issue will convert the holding into five shares worth about Rs 20 each. The total value of the holding remains unchanged at Rs 100. Live Events Once the stock begins trading ex-bonus, the price appears to fa...