I think I understand the formula, but I don't really know why...

I think I understand the formula, but I don't really know why the share price fell from 4.2 cents to 2.7 cents after the rights announcement but before it went ex rights. Given that the equity and earnings per share (including attached rights) would not have changed could it be that the fall was merely from holders selling down to balance their portfolio in readiness for taking up their rights.

The fall from 2.7 to 2.2 today was perfectly understandable seeing as its gone ex rights.