Priyanka Tiwari
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Shares of IT services company Coforge experienced a positive bump on the stock market today, rising by about 2%. The good news for investors? It's linked to the company's upcoming "stock split," with today marking an important milestone – the "record date" – for this event.
So, what's a stock split, and why is it happening?
Imagine you have one large chocolate bar. A stock split is like breaking that bar into five smaller, more manageable pieces. You still have the same total amount of chocolate, but it's now in more units. For Coforge, they're doing a "1 for 5" stock split. This means if you own one share of Coforge, you will soon own five shares. Consequently, the price of each individual share will become roughly one-fifth of what it was before the split.
The "record date" (which was today, as per the article) is basically the cut-off day. Investors who were officially registered as shareholders of Coforge by the end of trading on this date will be eligible to receive the new, split shares.
Why do companies like Coforge do this? Stock splits don't change the fundamental value of the company itself. However, they make each individual share cheaper. This lower price per share can make the stock seem more affordable and accessible to a wider range of potential investors, especially smaller retail investors. By increasing the number of shares available and lowering the price per share, companies hope to improve "liquidity" – meaning it becomes easier to buy and sell the stock.
The roughly 2% rise in Coforge's share price today suggests that investors are looking favorably upon this move, anticipating that the increased affordability and liquidity could attract more interest in the stock going forward.
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