What is a corporate action?
A Corporate Action is any event initiated by a corporation which impacts its shareholders. For some such events, shareholders may or must respond to the Corporate Action or select from a list of possible actions. Splits, dividends, mergers and acquisitions are all examples of Corporate Actions. For example, a company may decide to split its shares 2:1, leaving shareholders with twice as many shares as they had before.
In the context of this Help section, a corporate action is any event by a company that affects your holding of shares or other securities in that company and which may in turn require action by you. Examples of corporate actions include takeover bids and mergers, rights issues, capitalisationissues, stock splits, other capital reconstructions and scrip dividends.
A corporate action is generally defined as any type of event or decision that leads to a significant material change in the company. The implementation of a corporate action normally has an impact on shareholders and others who have a substantial stake in the success of the corporation. In the best scenarios associated with a corporate action, all parties involved benefit from the implementation of the action. It is possible for a corporate action to take on many different forms. One that usually has a direct impact on the individual shareholder is the splitting of shares. This type of corporate event is generally looked upon favorably by shareholders, as it means an increase in the number of shares held by each individual or entity holding shares of stock associated with the company. Another example of a corporate action would involve the implementation of a merger. Mergers may be seen as desirable or unfavorable by shareholders, depending on the projected benefits that are anticipate
Answer A corporate action is any material change to a security. This can be as simple as a name change, stock dividend, or a stock split; but also includes reverse splits, mergers, spin-offs and liquidations. In many cases, a corporate action results in a new position or a change to the cost basis of a security. GainsKeeper monitors all mandatory corporate actions to U.S. equities and automatically adjusts each of your stock investments.
A corporate action is an activity initiated by a company that affects the nature and/or quantity of stock that you hold. Some actions may require a response from you while others may not. It is important that you understand how a particular corporate action may affect your holding. There are numerous types of corporate action. These are the main ones: • Takeovers • Rights Issues • Open Offers • Suspension / liquidation • Conversion • Redemption • Tender Offer • Warrants See our Glossary for definitions and more details of these corporate actions.
