Presents the view that stock splits should be understood through movements after the ex-rights date rather than on the announcement date, and organizes specifically how money invested one share at a time and index supply and demand affect the price movements of stocks that have split. It presents practical methods of observation centered on price trends and changes in trading conditions after the ex-rights date.
The impact of a stock split is a combination of an increase in the number of shares and a decrease in the price per share, with the theoretical value of the holding unchanged. The 100 shares held before the split become 400 shares after the split, while the total value remains ¥800,000, but the share price is adjusted to a theoretical ¥2,000. The actual market price may move differently from this theoretical level.
The book poses the question of how to interpret the movements of buyers and sellers, focusing on changes in prices and trading conditions after the ex-rights date. Rather than emphasizing the pursuit of gains after the split announcement, it focuses on examining supply and demand after the ex-rights date and the relationship between actual trading value and the number of shares traded.
From the perspective of index supply and demand, it is necessary to break down how TOPIX constituents and additional fund purchases interact, taking into account the increase in the number of shares and the price adjustment resulting from the split. An increase in the number of shares resulting from a split alone may not provide sufficient grounds for additional purchases, so the relevant rules, timing and trading motives should be identified.
In practical terms, the book explains how to understand trading mechanisms and retail investors’ trading conditions, develop procedures for verifying them using materials and data, and observe post-ex-rights-date price movements, trading value and comparisons with the overall market on a consistent basis. Readers can organize what is known and what remains uncertain about stocks that have split and prepare for the next split announcement.