Shares of Multi Commodity Exchange (MCX) are flashing an 80% fall from its last closing price on Friday, January 2. However, investors should note that this is not a real loss; in fact, the stock is trading on a positive note.
Since MCX shares have adjusted to the 1:5 stock split, with January 2 being the record date for the corporate action, each existing share has been split into five shares. Due to this, the MCX share price is automatically adjusted to one-fifth of the pre-split price.
As a result, some charts are reflecting an 80% fall from its last closing price of ₹10,989 on the NSE, but this is only a technical adjustment, not a real loss. Adjusted for the stock split, MCX’s closing price for Thursday (January 1) is now ₹2,198.
When a company splits its stocks, the number of shares increases while the price per share reduces, keeping the total investment value and market capitalisation of the company unchanged.
