CONSOLIDATION
9 May 2016 By PDSNET1. Technical analysis: where a chart moves up and down within a narrow range, bounded by a support and resistance level. This is called a sideways market or a period of consolidation. A period of consolidation usually occurs at the top or bottom of a trend when the bulls and the bears are temporarily equally matched. It ends with a "break-out" when one or other gains ascendancy.
2. Financial account: the adding together of the balance sheets, income statements and other financials of a group of companies to arrive at their group financial accounts. Consolidations can be very complex because they involve the elimination of inter-company loans and the separate reporting of minority interests in profits and equity.
3. Corporate action: With shares, a consolidation occurs where a listed company's shares fall to the level (usually a few cents) where they become the plaything of speculators - causing significant trading and making it difficult to maintain their share register. The company might then consider consolidating their shares on some basis such ten-for-one. Then their issued share capital would include one tenth of the number of shares, but theoretically trading at ten times the price. An example of a share consolidation occurred in Aveng where the company has consolidated its shares 500-for-one with effect from 8th December 2021. This takes the share from being a 6c penny stock to a share worth about R30 per share - so it will no longer be a "speculators plaything". More recently, Nampak executed a 250-for-1 consolidation which took its share price from 74c to 18500c. When this happens the share's historical prices in your software will be adjusted accordingly to ensure that the chart still makes sense.
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