Skip to content
milkwoodhernehill

milkwoodhernehill

Can't Eat Food

Primary Menu
  • Best Restaurants
  • Food Traditional
  • Food & Cooking
  • Healthy Food
  • Recipes food
  • Italian Food
  • About Us
    • Advertise Here
    • Contact Us
    • Privacy Policy
    • Sitemap
  • Home
  • Corporate Actions by Public Companies–What You Should Know | Smart Change: Personal Finance
  • Food & Cooking

Corporate Actions by Public Companies–What You Should Know | Smart Change: Personal Finance

By Amanda M. Rye 7 days ago

Table of Contents

  • 1. Name or trading symbol changes
    • People are also reading…
  • 2. Stock splits
  • 3. Dividends
  • 4. Mergers and acquisitions
  • 5. Rights offering
  • 6. Liquidation and dissolution
  • FINRA’s role in OTC corporate actions
  • How can you find out about OTC corporate actions?
  • Be wary of announcements regarding FINRA “approval” of a corporate action


(FINRA Staff)

When you invest in stocks of publicly traded companies, something comes with the package–corporate actions, which may affect a company’s stock and, therefore, its shareholders. Corporate actions can range from making a change to a company’s name to issuing a dividend or making a major restructuring of the company through a merger or bankruptcy.

Some of these actions, such as a merger or bankruptcy, might make headlines if they involve large well-known companies. Other changes, such as a stock symbol change or a dividend payout, might not make headlines, but are important for investors to be aware of.

Related Posts:

  • Suggestions For Managing Small Business Funds

Here are six common types of corporate actions and how they might impact your investments.

Image source: Getty Images.

1. Name or trading symbol changes

These changes will appear on customer account statements and in account holdings. A company might make these changes to reflect its business focus or ownership more closely, or to distinguish itself from other companies. These changes may require the company to get a new CUSIP, the unique nine-symbol identifier assigned to most financial instruments. Check out: No, FINRA Did Not Approve That Security for Trading.

People are also reading…

2. Stock splits

A stock split changes the number of shares owned by each shareholder, but it does not affect the shareholder’s proportionate equity in the company. For example, in a 3-for-1 stock split, a holder of 100 shares would have 300 shares of the post-split security, but her equity in the company remains the same.

A company may decide to do a stock split to lower the per-share price of its stock; a very high stock price can intimidate investors who fear there is little room for price appreciation. Conversely, a reverse stock split reduces the number of shares outstanding and increases the price per share. A company might do a reverse split to meet minimum listing price requirements for continued trading on an exchange. For more information, check out A Piece By Piece Guide To Stock Splits.

3. Dividends

When a company distributes–in the form of cash or stock–a portion of its earnings to shareholders, it’s called a dividend. A cash dividend gives you a sum of money for each share owned, and a stock dividend gives you additional shares in the company. For example, a stock dividend of 10 percent means that for every 10 shares you own, you will get one additional share. Companies with substantial retained earnings might pay a dividend to pass the benefit on to its shareholders.

4. Mergers and acquisitions

A merger occurs when two companies agree to become one entity. An acquisition, on the other hand, occurs when one company purchases a majority of another company’s stock, which can be either a friendly or a hostile move. Mergers and acquisitions often involve a strategic decision to limit competition, influence a certain industry or grow a business. Check out How Companies Use Their Cash: Mergers and Acquisitions.

5. Rights offering

A rights offering occurs when a company issues “rights” to existing shareholders that entitle them to buy additional shares directly from the company in proportion to their existing holdings within a prescribed time period. Companies will announce an expiration date by which shareholders must buy in to the rights offering, generally one to three months from the date the company announces a rights offering. The price at which each share may be purchased is generally at a discount to the current market price. Rights are often transferable, allowing shareholders to sell them on the open market. Companies generally offer rights when they need to raise money.

6. Liquidation and dissolution

Liquidation is the process by which a company sells off its assets and closes down its business for good. In liquidation, the company’s assets are sold and the proceeds are used to pay off as many creditors as possible. Dissolution is the last stage of liquidation, in which the assets and property of the company are redistributed.

Secured bondholders get paid first, and common stockholders are last in line for any distribution of proceeds. Even when a company seeks protection under one of the relevant chapters of the United States Bankruptcy Code, its securities may continue to trade in the OTC market place after a bankruptcy filing. A stock with a “Q” as the last letter in its trading symbol indicates that the company has filed for bankruptcy.

FINRA’s role in OTC corporate actions

Federal securities regulations task FINRA with processing corporate action announcement requests by companies that trade in the over-the-counter (OTC) marketplace rather than on a national securities exchange. Corporate actions reportable to FINRA generally include mergers, a dividend or other distribution of cash or securities, stock splits and name and domicile changes.

FINRA’s processing function helps to keep investors and the market informed of company corporate actions. However, FINRA is not responsible for approving or disapproving the action the company is taking. And FINRA does not review such requests for a company’s compliance with any federal, state or other regulatory requirements. The public company is responsible for making sure their business decisions comply with all applicable laws and regulations.

Corporate actions for exchange-listed companies are handled by the exchange upon which a company is listed; and information on these corporate actions is available on the websites of the relevant exchanges.

How can you find out about OTC corporate actions?

If you own stock in an OTC company that is the subject of a corporate action, you will want to check the Daily List. The Daily List provides valuable information regarding corporate actions announcements for OTC securities, including ex-dates (the date that determines whether shareholders will receive a dividend), new issues, deleted issues, deletions, trading symbol and name changes. The Daily List also indicates if previously announced changes have been updated or cancelled.

Be wary of announcements regarding FINRA “approval” of a corporate action

Companies undergoing a corporate action often issue a press release or other communication, such as a tweet or other social media post, to provide details of the change. For instance, a company might announce a new corporate name that reflects a change in product lines or business focus. However, in the past, some companies have used these publications to suggest that FINRA has somehow “approved” a corporate action or that a corporate action will be effective once FINRA approves it. To clarify, this is not the case: FINRA does not approve corporate actions.

Subscribe to FINRA’s Investor Insights newsletter for more information about saving and investing.

10 stocks we like better than Walmart

When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Stock Advisor returns as of 2/14/21

The Motley Fool has a disclosure policy.

Get the latest local business news delivered FREE to your inbox weekly.

Tags: A Food Affair, A Food Chain, A Food Italy Is Famous For, A Food Web, A Foodborne Illness Is A Disease That, A Foodborne Illness Is A Disease Transmitted, A Foodborne Illness Outbreak Occurs When, A Foods, B Food Dishes, B Food Grade, B Food Items, B Food Logo, B Food Names, B Food Near Me, B Food Rating, B Food Science Co. Ltd, C Food Crush, C Food Names, C Food Rapper, C Food Shack, Food Addiction, Food Allergy, Food Allergy Symptoms, Food Allergy Testing, Food And Drug Administration, Food And Wine, Food Around Me, Food Aversion, Food Bank, Food Bank Of The Rockies, Food Banks Near Me, Food Baskets, Food Bazaar, Food Chain, Food Chain Definition, Food City, Food City Ad, Food City Near Me, Food City Weekly Ad, Food Coloring, Food Court, Food Delivery Near Me, Food Lion, Food Lion Near Me, Food Near Me, Food Near Me Open, Food Network, Food Open Near Me, Food Poisoning, Food Stamps

Continue Reading

Previous Greek Food, Cooking and Recipe Forum Added to Worldwide Greeks Website | News
Next Frankfort students find more than food at student-run food pantry
May 2022
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
3031  
« Apr    

Categories

  • Best Restaurants
  • Food & Cooking
  • Food Traditional
  • Healthy Food
  • Italian Food
  • Recipes food

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • July 2020
  • June 2020
  • March 2020
  • November 2018
  • October 2018
  • January 2017

Recent Posts

  • Innovative Food category nets $4.8b in 2021 thanks to alt-protein
  • After being named one of best in America, this Vermont restaurant is booked for the summer
  • Nasim Lahbichi: What It’s Really Like to Be a Food Content Creator
  • We got all of these. This is what we learned.
  • Homemade Dog Treats Recipe – Peanut Butter Dog Treats (How-to Video)

Tags

A Food Affair A Foodborne Illness Is A Disease That A Foodborne Illness Is A Disease Transmitted A Foodborne Illness Outbreak Occurs When A Food Chain A Food Italy Is Famous For A Foods A Food Web B Food Dishes B Food Grade B Food Items B Food Logo B Food Names B Food Near Me B Food Rating B Food Science Co. Ltd Business Cooking finance food Food Addiction Food Allergy Food Allergy Symptoms Food Allergy Testing Food And Drug Administration Food And Wine Food Around Me Food Aversion Food Bank Food Bank Of The Rockies Food Banks Near Me Food Baskets Food Bazaar Food City Food Delivery Near Me Food Lion Food Lion Near Me Food Near Me Food Near Me Open Food Network Food Open Near Me Food Poisoning Food Stamps recipe Recipes

Visit Now

wwe news
Intellifluence Trusted Blogger

BL

LP

TL

milkwoodhernehill.co.uk © All rights reserved. | Magazine 7 by AF themes.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT