Baillie Gifford Shin Nippon

aroominyork

I received an email today that BGS shares are going to be subdivided 5 for 1. Why do they do this?

I then googled for news on BGS and found this https://monroereporter.com/baillie-gifford-shin-nippon-plc-bgs-l-rci-trending-towards-a-reversal/63680/. I wouldn't know how to start interpreted this except that it suggests that if BGS rises much more it will trigger investors (or machines?) to sell. Are these theories credible? Being an IT I expect that any sales it would not affect the NAV and could only reduce the premium - is that right? - and if so is there any experience of how much these auto-sells affect premiums?

Asghar

It's nothing to worry about, shares split's are normal and in this case it makes the lower share price more appealing to buyers.

Already a thread started here.
https://forums.moneysavingexpert.com/discussion/5842804/baillie-gifford-shin-nippon-bgs

bostonerimus

Ahh stock splits. If you don't do it you might end up like Berkshire Hathaway A; they cost $300k/share.

ColdIron

Stock splits can make shares more accessible and increase liquidity but at their current price I'm not sure the effect will be as dramatic as it would be for higher priced shares. Spreads etc will be smaller but proportionate. Still, nothing to be concerned about

BGS £10
BATS £38
PNL £394
BRK.A ~ £2,200

Alexland

bostonerimus wrote: »

Ahh stock splits. If you don't do it you might end up like Berkshire Hathaway A; they cost $300k/share.

But that's part of the attraction - a demonstration of the power of compounding!

aroominyork

aroominyork wrote: »

I then googled for news on BGS and found this https://monroereporter.com/baillie-gifford-shin-nippon-plc-bgs-l-rci-trending-towards-a-reversal/63680/. I wouldn't know how to start interpreted this except that it suggests that if BGS rises much more it will trigger investors (or machines?) to sell. Are these theories credible? Being an IT I expect that any sales it would not affect the NAV and could only reduce the premium - is that right? - and if so is there any experience of how much these auto-sells affect premiums?

OK, got it re the split - thanks. Anything on the other part of my question?

Alexland

Who knows what other people's automated trading algorithms might cause - but if there was a general market sell of this trust then it would negatively affect the IT share price (causing the premium to reduce or move into discount) but not the underlying NAV which would be based on the market prices of the underlying assets. Unlike an open ended fund an IT would not be forced to sell assets if the market demand significantly declined.