Mechanism library · English
What splits, bonuses and dividends do to a price
The mechanical effect of each corporate action on the share price — and why charts get adjusted for them.
A split changes the number, not the thing
A stock split divides each existing share into several new ones. A 1:5 split turns one share into five, each priced at roughly one-fifth — because the company's value did not change, only the number of pieces did. Nothing about the business changed in that instant; the price change is arithmetic, not a fall in value. Charts are adjusted backwards so that the pre-split and post-split prices describe the same thing.
The event types this platform records from exchange filings — not news articles.
| Event | What the filing states |
|---|---|
| Dividend | A cash amount and a record date |
| Split / bonus | A ratio applied to the existing share count |
| Results | A period the issuer has closed and filed |
| Board meeting | That a meeting is scheduled, not what it will decide |
A bonus is a split in disguise
A bonus issue gives existing shareholders additional shares for free — a 1:1 bonus doubles the share count at half the price each, which is the same arithmetic as a 1:2 split wearing different paperwork. The market price adjusts the same way, and the same chart adjustment applies. The accounting differs; the price mechanics do not.
A dividend leaves the company as cash
A dividend pays cash out of the company to its shareholders. On the day the share goes ex-dividend, the price mechanically opens lower by roughly the dividend amount — the buyer from that day onwards is not entitled to that payment, and the price reflects it. The shareholder has not lost money: the value left the company as cash and sits in the shareholder's account instead. Charts are adjusted here too, for the same reason: so the line describes the company's value, not its distributions.
How to read an adjusted chart
An adjusted chart rescales past prices so that only real changes in value appear as changes in the line. The printed historical prices on it are not the prices anyone paid on those days — they are those prices restated in today's units. That trade-off is the honest one: a chart that shows the actual traded price shows phantom crashes at every split, and a chart that hides them shows the economics. Adjusted charts show the economics, and label themselves as adjusted.