A dividend is a corporate action that alters a companys stock price. Dividends may be in form of cash or stock. Is subject to approval by a companys board of directors and is a distribution of a companys earnings to a specified class of shareholders.
A stock split is a common corporate action that alters a companys existing shares. In a stock split, the number of outstanding shares increases by a specified multiple, decreasing the stocks par value. The market value of the total number of shares remains the same.
A reverse split is a common corporate action that alters a companys existing shares. In a reverse split, the number of outstanding shares is reduced by a specific multiple, increasing the stocks par value. The market value of the total number of shares remains the same.
Merges and Acquisitions (M&A)
Mergers and acquisitions (M&A) is another corporate action that brings material changes to companies. In a merger, two or more companies come together to form a new company. The existing shareholders of merging companies keep a shared interest in the new company. Contrary to a merger, an acquisition is a transaction in which a company, the acquirer, takes over another company, the target company. The target company ceases to exist, and the acquirer assumes the target business. The acquirer company stock continues to be traded.
Is a type of divestiture where a parent company sells all of the shares of a subsidiary or distributes new shares of a company or a division it owns to create a new company.
How Folionet handles Corporate Actions?
The board of directors of the issuing company determines the terms and conditions of corporate actions.
Dividends, stock splits, reverse splits, mergers, acquisitions and spin-off are processed by our clearing partner, Apex. All the adjustments will be made to your portfolio in a timely manner.
Keep in mind that sometimes certain stocks will be restricted from trading, while the Corporate Actions team work to process these changes.