What Happened to Port of Tauranga's Share Price?
We've recently had a number of calls from people concerned that the price of their Port of Tauranga shares had fallen - SIGNIFICANTLY.
Our answer was "Don't panic".
On the 18 October 2016 Port of Tauranga completed a five for one share split. There are now five times as many Port of Taurangas shares on issue.
Investors have been given four extra shares for every one share they used to own, for free! But no not really, the price has adjusted to take the share split into account.
Port of Tauranga's share price on the 17 October was $19.25.
On the first day of trading after the split the price was $3.73. But that is not as bad as some seemed to think.
To compare the two prices we have to divide the price on the 17th by five and we get $3.85.
Contrary to our expectation the price fell immediately after the split from $3.85 to $3.73. But the price recovered the next day to $3.80. $3.73 might have been a bargain.
We expect that more people will consider buying Port of Tauranga shares at around $3.80 - $4.00 than would have if the price was $19.00 - $20.00 and so we expect the share price performance will be better than if the split hadn't occured.
But there is no way of proving this one way or the other as there are innumerable other factors to take into account.
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