This article was updated on Aug. 13, 2015.
Some shareholders in 3D printing software maker Dassault Systemes (DASTY +0.05%) got a huge jolt on July 23, 2014, when it appeared on Google Finance, Yahoo! Finance, and other top financial sites that their stock had plummeted 49% in a single day. I wrote soon after the close of the market on that day that they could rest easy, as Dassault had not suffered a massive sell-off, despite what their stunned eyes were seeing on their computer screens. The France-based company's stock had split 2-for-1 on that day, and that fact had not yet been reflected in the price-per-share data on the financial sites.
That news appeared nowhere on the financial sites, so I had to first assume -- we'll get to why I immediately made this assumption -- that it was a 2-for-1 split. After some investigation, I found the following on page 3 of Dassault's first-quarter 2014 earnings report released in March 2014:
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: Daily volume
This type of delay in financial sites reflecting stock splits 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 in 2014 with Sweden-based 3D printing company Arcam. In Arcam's case, the stock split was a less common 4-for-1, with the share price appearing to plummet about 70%. (The stock was up that day, which is why the drop was less than the 75% it would have been to account solely for the split.) According to comments on my Arcam article, some investors didn't know what was happening. So, I knew some Dassault Systemes investors could be just as panicked.
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. All the major sites list daily trading volume, as well as an average (usually a three-month average) trading volume.
Since the original version of this article was published, there have been no "real" big drops in Dassault's stock. In fact, it's been doing well -- its year-to-date 2015 return is 23% versus a mere 2.7% for the S&P 500. It's also beat the market over the last one-, five-, and 10-year periods, too. Look for more current coverage of Dassault Systemes coming soon.
