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If you recently bought a few shares of

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GEW   Monday, 10/22/18 12:45:15 PM
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If you recently bought a few shares of Hon Hai Precision Industry Co. Ltd. (TWSE: 2317 TT) - aka Foxconn - you might be getting a little surprise soon...

Trading has been temporarily suspended on the Taiwan Stock Exchange (TWSE) until Friday, October 26. (This isn't the surprise.)

"Why? What's going on?" you ask.

Foxconn is undergoing a capital reduction of about 20%.

What's a capital reduction?

A capital reduction is when a company decreases the amount of shareholder equity through stock cancellations or repurchases. While Foxconn's market capitalization won't change, the number of shares outstanding and available to trade will be reduced.

As reported by Bloomberg, Foxconn said in May it would be taking this action to increase shareholder value and improve its capital structure. Same market cap with fewer outstanding shares means those shares - your shares - will be worth more.

That's great news for existing (and future) shareholders!

Plus, existing shareholders will receive a $0.06 dividend per share held as part of the capital reduction. (Surprise!)


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