On 4 July, LHV Group shares will undergo a stock split on the principle of 10 shares for one. Investors themselves do not have to do anything, the total value of their shares will not change – the number of shares they own will automatically increase tenfold, while the price of one share will decrease tenfold. The split will take place to make trading in LHV shares more accessible.
For example, if the price of LHV’s share is EUR 35 immediately before the event and an investor has acquired 10 shares, then after the split, i.e., from Monday, 4 July, the investor will have 100 shares at a price of EUR 3.50. In the Internet Bank, the acquisition price of the security is also automatically adjusted, i.e., if the stock had been acquired at exactly EUR 30 before, then after the split, the acquisition price displayed will be ten times lower, i.e., EUR 3.00.
The last opportunity to acquire securities at the old price is 1 July 2022, and it is expected that from 4 July, the shares can already be purchased at the new price. At the same time, the ISIN code of the security will also change, becoming EE3100102203. Investors do not have to do anything themselves, even if their transactions in LHV shares are still pending. Such transactions will also change automatically from 4 July, and investors will see the new state of play in both the Internet Bank and the mobile app from 4 July.
Trading in LHV Group shares will start on 4 July as soon as possible, once it has become clear that the stock split has been implemented correctly in the systems of all banks.
The main reason why publicly traded companies split shares is to make them more accessible to a larger number of investors, and the potential increase in trading activity resulting from this. Thus, going forward, LHV shares can also be purchased at a lower price.
More details about the stock split with the examples of Tesla and Apple can be read in the LHV Financial Portal article ‘Stock split – a magic wand to raise the price?’.
Frequently asked questions
What is a stock split?
A stock split figuratively means cutting a share into pieces – one share is divided into several shares. A 10-to-1 stock split of LHV Group (LHV1T) shares means that the nominal value of one share is divided by ten, and the amount is multiplied by ten. Thus, the total value of a client’s shares in the portfolio does not change.
So far, Mari had 100 LHV shares at an acquisition price of EUR 35/pc., so the total value of the shares in the portfolio is 100 x 35 = EUR 3,500.
After the split of LHV Group shares, Mari has 1,000 shares at an acquisition price of EUR 3.50/pc., i.e., the total value of the shares in the portfolio is 1,000 x 3.50 = EUR 3,500.
Why will the stock split be performed?
The main reason for the stock split is that through the reduction of the market price of one share, the share becomes available to more investors, thereby increasing the tradability (liquidity) of the share. The stock split will not change the market value of the company, the upside potential of the share price, or the success of the company’s business.
What change will take place regarding the stock split?
The stock split increases the number of shares in the portfolio and reduces the nominal value of the share. The average acquisition price of the share will also change, which is important when filling in the income tax return in the future. Changes are made automatically and the investors themselves do not have to do anything.
As an LHV investor, do I have to do anything in relation to the stock split?
Investors themselves do not need to do anything. Changes in their portfolio, bank account and mobile app are made automatically. The same applies to pending transactions.
On what day can I buy shares at the new price for the first time?
From the investors’ viewpoint, the change will take place on 4 July 2022, and starting from that day, LHV shares can be acquired at the new price. Trading in LHV Group shares will start on 4 July as soon as possible, once it has become clear that the stock split has been implemented correctly in the systems of all banks. The last day for trading LHV shares at the old price is 1 July.
What is the new ISIN code of the LHV share?
Along with the stock split of LHV Group, the unique ISIN code of the security will also change, becoming EE3100102203.
I bought LHV1T shares at the old price on 30 June or 1 July. What should I know?
The purchased shares will be settled at the new price and quantity on 4 July and 5 July, respectively. You do not have to do anything separately, and the value of your transaction will remain the same.
Why was my pending LHV1T order cancelled?
All LHV1T orders were cancelled by the stock exchange in order to draw the investors’ attention to the significantly changing price and quantity resulting from the split.
Will LHV’s stock symbol (LHV1T) change?
It will not.
Do I need to pay attention to anything when declaring income?
When declaring in the regular account system, the acquisition price of shares in LHV reports is already automatically adjusted at the post-split price.
When declaring in the investment account system, the split is tax-neutral and does not need to be reflected.