I’ve been hearing many people talk about things like:
Technical adjustments
Stock split
Reverse split
Bonus shares
Rights issue
…especially in the Nigerian stock market.
But honestly, I don’t really understand what these things mean.
Sometimes after a company announces something like a stock split or bonus issue, I notice that:
The share price changes
The number of shares changes
Investors start reacting emotionally
And many beginners immediately think:
“Ah! The company has become cheaper!” Or: “Investors have become richer overnight!”
But I’ve also heard people say:
Technical adjustments do NOT change the real value of the company
And that these are mostly structural or accounting adjustments
So now I’m confused.
Please explain in a simple way:
What technical adjustments really mean in the stock market
Difference between stock split and reverse stock split
What bonus issue and rights issue mean
Why companies do these adjustments
And what beginners should understand before reacting emotionally to them
Please explain it in simple English without big grammar so even a beginner can understand clearly.