Corporate action is an event initiated by a public company that brings or could bring change to the securities—equity or debt—issued by the company. Corporate actions include stock splits, dividends, mergers and acquisitions, rights issues and spin-offs.Most commonly, in your Client’s Area you may see a 'corporate action' issued due to a stock split.
Stock split is a decision by a company's Board of Directors to increase the number of outstanding shares by issuing more shares to current shareholders.
Reverse stock split is a type of corporate action which consolidates the number of existing shares of stock into fewer, proportionally more valuable, shares.
These events are introduced by security issuing companies. Here’s how these events will display in your account.
In case of reverse stock split by 3:
In case you had 50 shares on your account, the new quantity of your holdings would be 16. Two remaining shares would be paid to you in cash.