Naspers’ recently announced share split has come into effect and the shares are now trading at 20% of what they were worth at the start of the week.
A stock split is a decision by a company to increase the number of outstanding shares by a specified multiple. This is typically done to reduce the price per share of a company’s securities without affecting its market capitalisation.
In this case, the subdivision will be done in the ratio of five-for-one for each respective class of issued shares, with the aim of making it cheaper for investors to access the group’s securities.
As such, the stock closed 79.8% lower on Wednesday at R1,263.62.
Until yesterday, Naspers had one of the highest share prices on the JSE. On Tuesday, the stock closed at R6,189.49.
When the group announced the split in mid-September, it said: “The market price of Naspers shares has increased significantly in recent years. Naspers N ordinary shares currently trade at one of the highest prices per share on the JSE, significantly exceeding the average price per share of constituents of the JSE’s top 40 index.”
Naspers has two classes of stock: N ordinary shares and A shares, which carry super voting rights.
The move to dilute the value of each security is also expected to align the price per Naspers N ordinary share more closely with that of Prosus, which is trading at about R1,220.24.
The new shares to be issued as part of the dilution will be credited to shareholder accounts on October 6.
As part of the series of action, the group will suspend its ongoing share buyback programme until the subdivision is done. The Naspers/Prosus move is one of the largest such corporate actions seen on the JSE, with the group reporting it has returned more than $35bn (about R600bn) across the group since inception in 2022.
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