2Mês
Thanks for the introduction! But what was the reason for the massive sell-off in 21?
•
33
•
@Zerax In May, Atlas Copco carried out a 4:1 stock split (more precisely: a split combined with an automatic redemption of shares, a typical Swedish model).
What happened: Anyone who previously had 1 share for, say, SEK 400, then had 4 shares for SEK 100 each.
The effect: The share price looks on the chart as if it had fallen by 75%. In reality, the value for shareholders did not change on that day.
Despite the split, there was also a real period of weakness during this time (end of 2021 to mid-2022). The share fell by around 25-30%.
Why was this?
Interest rate fears: In 2022, interest rates shot up worldwide. Atlas Copco is a "highly valued" share (high P/E ratio). Such shares suffer the most when interest rates rise because future profits are worth less.
What happened: Anyone who previously had 1 share for, say, SEK 400, then had 4 shares for SEK 100 each.
The effect: The share price looks on the chart as if it had fallen by 75%. In reality, the value for shareholders did not change on that day.
Despite the split, there was also a real period of weakness during this time (end of 2021 to mid-2022). The share fell by around 25-30%.
Why was this?
Interest rate fears: In 2022, interest rates shot up worldwide. Atlas Copco is a "highly valued" share (high P/E ratio). Such shares suffer the most when interest rates rise because future profits are worth less.
•
55
•2Mês
@Raketentoni So everything is clear. Thanks for the explanation. 👍
•
22
•