Corporate Actions

What are the types of corporate actions I may be subject to as a shareholder?

A corporate action is an event—agreed upon by a company's board of directors and authorized by its shareholders—that causes material change to the company's securities. Typically, corporate actions can be considered voluntary or mandatory.  Some of the more common types of corporate actions you may encounter while investing through Fennel are: Stock Splits, Reverse Stock Splits, Delistings, Mergers or just a Symbol change.

A stock split is when you receive additional shares for the amount of shares you hold as of a specific date, with the stock usually being valued at less per share than before the stock split.  A reverse stock split is the opposite, where you may have less shares beforehand but usually worth more per share afterwards.  These actions may affect your positions and cost basis of the stock or, in cases where Cash is provided “in lieu” of shares, you may receive funds.  Mergers or Acquisitions may lead to you receiving a new security altogether.  Delistings occur when a stock is removed from a National Exchange (i.e., NYSE or NASDAQ), but securities may also be added to an exchange, i.e., from OTCBX to NYSE.  A symbol change is a change in how the stock is known, and would not affect your holdings in stocks or funds.

What should I know when my holdings are going through a Stock Split or Reverse Stock Split?

You need to be holding the stock on the Ex-Date to be part of the corporate action.  If you happen to sell the day before, you will not be part of this corporate action as you don’t hold the stock.

When you hold positions that go through a corporate action, those securities holdings will generally convert overnight and your stock positions will update in the Fennel app automatically.

Any resulting funds that you may receive (e.g. from a Cash in Lieu (of stock) payment) will generally be available for your use in your account after 7 to 10 business days.