With "Tadawul" announcing the reference price for "Al-Rajhi" shares at 71.40 riyals after the approval of the capital increase to 60 billion riyals, the lobby of Al-Yamamah University turned into a mini-analysis platform. The discussion did not stop at free shares or cash distributions, but delved into the deep question that is puzzling traders today: Is the new price an opportunity to enter, or has the stock inflated and it's time to exit?

Double "Eid"!

Student Sultan believes that "what happened is an early Eid gift for shareholders! The bank will distribute 1.75 riyals in cash per share at the end of April, plus a free share for every two shares. Those who owned 1000 shares now have 1500, and the new adjusted price (71.40 riyals) may seem very attractive to some and will draw huge liquidity from small traders who saw the stock as high when it was above 100 riyals. I see it as a snatching opportunity."

The cake didn't grow... it was just divided!

Student Leila says: "The language of numbers knows no emotions, Sultan. Your portfolio did not increase by a single halala on the entitlement day; the price automatically dropped to match the increase in shares. Al-Rajhi distributed a total of 2.5 riyals per share for the year 2025 (10 billion riyals). Now, with the jump in the number of shares to 6 billion, the bank will face significant difficulty in maintaining the same distributions per share, which may pressure the price later on."

Freezing cash for growth (the holding perspective)

Here, student Saud adds: "This is not about daily speculation. Al-Rajhi's decision to capitalize 20 billion riyals from retained earnings and freeze it in capital is a declaration of intentions for massive expansions. The bank is sacrificing liquidity now to buy a larger seat in project financing, and holding the stock is a bet on this strategic expansion."

Lending fuel and market share

Finance professor Dr. Abdullah added, saying, "The discussion is healthy and reflects the diversity of investment strategies. In the banking sector, the golden rule is: (Capital sets the ceiling for lending). This trend is common among leading banks that wish to finance billion-dollar projects for Vision 2030 (Corporate Lending) to reduce the risks associated with individual loans. The decision does not carry a recommendation to sell or buy, but rather sorts investors according to their ambitions: quick returns or cumulative growth."

The smart number: The challenge of 15 billion!

The specialized financial analyst stated: "For those looking for a compass for their decision, the most important number here is (15 billion riyals). In 2025, the bank distributed 10 billion riyals to give shareholders 2.5 riyals per share. Now, with the increase in the number of shares to 6 billion shares, the bank needs to achieve and distribute 15 billion riyals annually to maintain the same previous return (2.5 riyals). This massive required growth in net profits is the real challenge that will determine the stock's future path."

Yamamah Insights Opinion

The trading screens that canceled "Al-Rajhi" orders to reprice it at 71.40 riyals reflect an investment crossroads. The bonus shares here are not "free gifts", but rather a capitalization for growth and a direct challenge to management to prove its operational efficiency. Your decision to sell or buy reflects your belief in the bank's ability to manage the new 20 billion. The future test: The general assembly authorized the board of directors to distribute interim dividends in 2026. The market will closely monitor upcoming earnings announcements; if the quarterly distributions disappoint given the size of the new share base, the capital expansion may shift from a positive catalyst to a burden weighing on the stock.