On Wednesday January 31st, 2018, the outsourcing giant Capita Group plc issued a shock profits warning, suspended dividend payments indefinitely and announced plans for a £700m rights issue. Capita’s share price promptly fell off a cliff, dropping by 47.53% over the course of the day:BloombergBut is this such a shock, really? Capita’s share price has been declining since 2016. Although the company declared an interim dividend, the share price dropped sharply on the news:BloombergSo perhaps January's profit warning was not quite the surprise that it appeared to be. The sharp drop in share price could simply be markets pricing in shareholder dilution due to the proposed rights issue.

Source: Forbes February 01, 2018 01:07 UTC