What is a corporate action?
A corporate action is any event initiated by a company that alters its capital structure or equity. These actions directly impact both the company and its investors by changing the number of outstanding shares, share prices, or the overall composition of the business.
Learn more about corporate actions in our Academy.
Corporate actions and Stocks
Stocks give you actual ownership in a company. This entitles you to dividends, new stocks from capital increases and voting rights at the annual shareholder meeting.
With legacy assets, you continue to receive the economic value from corporate actions, such as dividends. However, the crediting timelines may vary depending on the technical structure of the derivative contract.
With legacy assets, although you receive dividend payments or other potential advantages from corporate actions, you will not have any voting rights. Furthermore, all your claims (e.g. dividends) are only valid against Bitpanda and not against other third parties (issuing party, depositary bank etc.).
Type of corporate actions available on Bitpanda
Trading Update: For corporate actions, trading is halted while rewards/credits are distributed.
Eligibility: In general, all corporate actions are dependent on the number of stock units you own before the announcement or cutoff date.
Stock Splits
Increase the number of shares available while lowering the price per share.
To be eligible, own stock before the record date. New shares are issued after the distribution date.
Reverse Splits
Decrease the number of shares available while increasing the price per share.
Eligibility requires ownership before the record date. The new ratio is applied after the distribution date.
Dividend Payments
Part of the company’s profits distributed to shareholders based on share count.
Own stock before the ex-dividend date. Payouts can be monthly, quarterly, or annually.
Stock Dividends
Occurs when one company aims to acquire another company.
Holders can decide to sell their shares at the designated price or reject the offer.
Spin-offs
A company separates a business unit and transfers it into a new entity.
You will usually receive new shares for this entity, depending on the company's decision.
Mergers & Acquisitions
Companies combine; old stocks are replaced with new ones.
Specific conversion ratios or the option to accept a cash offer will apply.
Worthless removal
Company A’s shares are deemed worthless and removed from public exchanges.
It means that clients that hold a position in such a company have their position removed from their account.
Liquidation
A public company or an ETF sells assets and distributes the cash to holders. The client receives cash per share at a predetermined rate.
So the client position does not change, but the price of the stock / ETF normally declines.
Please note that Bitpanda doesn’t have any impact on these corporate actions and cutoff dates.
Processing of Corporate Actions by Bitpanda
Bitpanda distributes corporate actions after two business days of the company's execution date. Please be aware that market conditions may occasionally cause delays; however, you will always receive an email notification once the action is completed.
Currency Conversion: All cash-based corporate actions are paid out in EUR. If a payment is originally issued in another currency (such as USD dividends for Apple), Bitpanda automatically handles the conversion to EUR for you.
Trading Halts: To ensure accuracy during processing, particularly for stock splits or reverse splits that involve price and position adjustments, trading for the affected asset may be temporarily suspended.