BYD is net cleared! Will you enter the market after the threshold is lowered?
BYD's dividend was cleared today! The shares have been "split up", what impact will this have on the prices of warrants and stock derivatives?
$BYD COMPANY (01211.HK)$ Today is the ex-dividend date. Previously, the company announced plans to increase the stock dividend method of profit distribution and to convert part of the capital reserve into share capital. The profit distribution plan for the year 2024 has been adjusted to "distribute a cash dividend of 39.74 yuan (including tax) for every 10 shares to all shareholders, with a total cash dividend of about 12.077 billion yuan, and 8 bonus shares for every 10 shares, converting 12 shares for every 10 shares from the capital reserve."
This means that the 10 shares originally held by the shareholders will become 30 shares, and the total share capital of the company will thus expand to three times its original amount. After the implementation of this stock distribution and capital increase plan, BYD's total share capital will increase from 3.039 billion shares to 9.117 billion shares.
If holding the relevant warrants or bull-bear certificates, will the 'price of the warrant' also 'one for three'?
According to aastocks, the answer is no, the price of the warrants will not be affected by the ex-dividend. The issuers will only make corresponding adjustments to the terms of related products based on the ex-dividend, including the exercise price of the warrants, the exchange ratio, etc., and the price of the warrants will not be split by 'one for three'.
As for the bull-bear certificates, the relevant redemption prices will also be adjusted on a 'one for three' basis. Investors will not trigger the relevant redemption mechanism due to this single factor of the ex-dividend. However, after the ex-dividend, the circulation of shares, entry thresholds, etc. will have changed, and investors need to assess and pay attention to the associated risks, and monitor whether subsequent fluctuations will cause the bull-bear certificates to reach the relevant redemption prices.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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