What are corporate actions?
For some events,shareholders or bondholders are permitted to vote on the event. Examples of corporate actions include stock splits, dividends, mergers and acquisitions, rights issues, and spin-offs.
What is the typical course of corporate actions?
Announcement day: After the listed company decides to carry out the company action, it should first issue an announcement.
Delivery date: If the company needs to deliver stock or cash in action, it is not delivered on the day of the ex-rights day, but needs a period of time. The length of time is determined by the listed company and is uncertain until the actual delivery.
What are dividends?
Dividends refer to the distribution of interest by listed companies to shareholders. After the settlement on the day before the ex-rights date, if the client holds the stocks of the listed company, he will participate in the dividend distribution. Cash will be deposited into the shareholder's account on the distribution date.
What is a stock split?
For example, 1:2 stock split, assuming that the original stock price is $100 and the outstanding shares are 100,000, after the stock split, the stock price will become $50 and the outstanding shares will become 200,000. After the stock split, the shareholders’ equity remains the same, and the company’s market value also remains the same. What changes is the stock price and the number of shares outstanding.
What is a reverse split?
For example, a 3:1 partnership, assuming that the original stock price is $10 and the circulating shares are 90,000, after the merger, the stock price will become $30 and the circulating shares will become 30,000. After the merger, the shareholders' equity remains the same, and the company's market value also remains the same. What changes is the stock price and the number of shares outstanding.