r/NepalStock • u/imcgr • 4d ago

Bonus Share/Dividend Bonus shares = stock split?

When companies in NEPSE give bonus shares and the price drops after adjustment, isn’t that basically just a stock split? Any real difference for us investors?

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u/Ba-ba-boy 4d ago edited 4d ago

Giving bonus shares doesn't mean they are buying the shares at current market price and giving it your acc. They are increasing the no of shares while the total value of all the shares combined remains same. Now divide the constant total amount by the more no of shares, this will cause the price to decrease a bit. Kinda like inflation but not really, the share is less valuable due to averaging.

Edit: Stock spliting is new term for me so learnt about it, bonus is not stock split ig as the stocks aren't being split into diff categories with diff price so if that helps your curiosity. Stock split ig, is like a company splits its share into 2 types one which represensents 1 kitta and other which represents 0.1 kitta so two different schemes idk just a way to understand how it is diff from bonus shares

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u/imcgr 4d ago

lmao yes i understand how its done. I just don’t get what makes it different from splitting a stock price

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u/Ba-ba-boy 4d ago

Yeah about that…… 😅, didn't read your post thoroughly on the 1st go