Why 3-D Printing Software Maker Dassault Systemes SA's Stock Apparently Crashed 49% Today

Shareholders in the 3-D printing software maker Dassault Systemes (NASDAQOTH: DASTY  ) can rest easy, as their stock is not down 49% today, no matter what they see on Google Finance, Yahoo! Finance, and other top financial sites today. The France-based company's stock apparently split 1:2 today, and that's not yet reflected in the price-per-share data on the financial sites.

I say "apparently" because I also had to assume that the split was effective today, as news isn't easy to find. Dassault's first-quarter earnings report in March, however, did include the following on page 3:

The Board of Directors has scheduled the Annual Shareholders' Meeting for May 26, 2014 and is recommending a 4% increase in the annual cash dividend per share equivalent to €0.83 per share for the fiscal year ended December 31, 2013, compared to €0.80 per share for the fiscal year ended December 31, 2012 and a two-for-one stock split effective from July 2014. (emphasis mine)

A telltale sign of a split, or how not to be freaked out again: daily volume
This type of delay isn't uncommon, especially when we're talking about foreign companies trading over the counter in the United States. A similar scenario played out earlier this year with Sweden-based 3-D printing company Arcam. However, in Arcam's case it was less obvious, as the stock split was 1:4, with the share price appearing to fall 70%. According to a couple comments on the article I wrote, some investors didn't know what was happening. I'd assume that the same might be true in Dassault's case.

If you ever see a huge drop in stock price, it will be almost surely be due to a stock split if the daily trading volume is just average. 

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Comments from our Foolish Readers

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  • Report this Comment On July 23, 2014, at 5:33 PM, wmarantz wrote:

    I came to the same conclusion after much web surfing (which revealed that the stock was, in fact, up about 1% today, and had a p/e of 17+.) So I didn't buy it.

    They don't even mention the 2-1 split on their bloody website!

  • Report this Comment On July 23, 2014, at 7:44 PM, TMFMcKenna wrote:

    Wmarantz,

    I understand your frustration. I don't know why companies don't make sure to release a quick PR a day or two before the actual split, so it's posted on ticker feeds, and quite visible on the Investors Relations sections of their websites.

    TMFMcKenna

  • Report this Comment On July 24, 2014, at 10:39 AM, PuddinHead42 wrote:

    If a stock "drops" 50% and there is no huge increase in volume, then you can be confident the stock is not crashing!

  • Report this Comment On July 24, 2014, at 11:27 AM, gospeljohn668 wrote:

    I nearly panicked when I saw that! Had I not been a moderately seasoned investor, I might have done something drastic. Fortunately I did my own digging (for about an hour), hoping all along it was a split, and then strangely remembered that I'd read something about that awhile back. I'm glad google and yahoo caught up, but I fear for the newbies/day-traders (which could have sent it even lower, especially if they had stop limits in place)! Even my online broker was showing a harsh loss in my account, and probably would have sold my shares if I'd had a stop order in place (fortunately, I don't typically use those either). Anyways, hopefully these lines of communication get cleared up in the future lest people accidentally sell their positions or make an uninformed decision.

  • Report this Comment On July 24, 2014, at 2:16 PM, kghagans wrote:

    They most certainly did mention the split on their web site. Read their news page carefully.

    "2014 full year outlook reaffirmed and EPS objective adjusted for two-for-one stock split"

    http://www.3ds.com/press-releases/single/dassault-systemes-r...

  • Report this Comment On July 24, 2014, at 5:15 PM, TMFMcKenna wrote:

    gospeljohn668,

    I'm sure you're not the only one who panicked. I just don't think investors should need to spend an hour, as you did, or even less time digging. In some cases, it's a given that there will be a delay in adjusting the price-per-share data on financial sites. So it would seem simply enough for cos. to post a reminder PR a day or two before that makes it onto ticker feeds.

    kdhagans,

    That item was posted today July 24 -- a day after the fact.

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