What are corporate actions and how can they affect my investments?

Corporate actions are procedures undertaken by listed companies affecting their issued securities and, therefore, their shareholders. Common corporate actions include dividend payments, stock splits and mergers or acquisitions.

If a corporate action requires shareholders to decide between different options, Bitpanda will decide on behalf of its users. You will be informed about any decision made in addition to any consequences this may have for you.

You can find an overview of the most important corporate actions and their potential implications for you below:

Dividend payments

Dividend payments are distributions of a company’s earnings issued to shareholders by publicly listed companies. Dividend issues must be approved by the entity’s board of directors and can happen on a periodic basis, for example, quarterly.

In order to qualify for an announced dividend payout, it is important to keep the necessary holding periods in mind, i.e. the two dates in between which you need to hold the shares. If you hold different volumes of a certain asset on both dates, we will take the smaller volume as the basis for the dividend payout calculation.

Dividend payout amounts and dates will be arranged in line with the issuing entity. Please refer to the list of upcoming corporate action events to get all the information you need.

Stock splits (Forward & Reverse)

Stock splits are corporate action events increasing or decreasing the amount of outstanding shares proportionally. A regular stock split (also called a “forward stock split”) is designed to increase the outstanding amount of shares and the share price drops proportionally. A reverse stock split works the other way around: The number of outstanding shares is reduced and consequently the share price rises in proportion.

If a company offered as part of the Bitpanda portfolio decides to perform a stock split, trading will be suspended for a certain period of time. As soon as the stock split has been performed, i.e. the outstanding volumes have been adjusted, trading will be resumed as usual.

Mergers and Acquisitions

Companies undergoing merger or acquisition procedures are merging their business with another entity. Depending on the transaction details, either one of the two merging companies will remain a separate entity integrating the other, or a completely new entity will be founded.

If a company within the Bitpanda portfolio is undergoing a merger or acquisition procedure, trading will be suspended for a certain period of time. Depending on the transaction details, Bitpanda will inform the affected Bitpanda Stocks holders about the outcomes and implications the transaction will have on their investment.

Please refer to the following link to get an overview of all upcoming corporate action events, including all the relevant dates.

Keep in mind

Bitpanda Stocks enables you to make fractional investments. To allow for this, Bitpanda issues a derivative contract which is backed by the underlying stock or ETF. You can read more about this here.