Why Wipro Shares Got Wiped Out Monday
Shareholders of Indian IT company Wipro Limited (ADR) (NYSE: WIT) went on quite a ride Monday on what appears to be confusion over an upcoming dividend payment. Shares plummeted 50 percent in early trading on 170,000 in volume, despite the company’s $20.3 billion market cap. At about 9 a.m., the NYSE halted shares of Wipro on pending news, leaving shareholders fearing the worst. However, at around 1 p.m., Wipro issued a press release clarifying market concerns over its dividend.
“The company felt it was important to clarify to the market that the payable date and ex-dividend date for its ADR (American Depository Receipts) bonus issue, or stock dividend, are yet to be determined,” the release read.
Earlier this month, Wipro authorized raising its share capital to 11.27 billion rupees, according to Reuters.
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Clear As Mud
It seems as though the NYSE was as unclear as the markets as to what was going on with the company’s ADR stock dividend. Wipro said the NYSE halted trading in accordance with its standard practices.
“At NYSE, for ADR stock dividends or bonus issue, the ex-dividend date is set as the first business day after the stock dividend is paid, which is also after the record date,” the company said.
“Therefore, NYSE has not yet declared an ex-dividend date for Wipro’s ADR program. Once the payable date is declared, NYSE will announce the ex-dividend date for the ADR.”
For Wipro shareholder’s, all’s well that ends well. After the press release was issued and shares resumed trading, Wipro finished Monday’s session nearly flat compared to Friday’s close. The stock is now up 7.3 percent in 2017.
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