Corporate Actions
A dividend, a split, a buyback, or a takeover defense can move a stock overnight, and each one is a corporate action.
This set of explainers covers dividends and the ex-dividend, record, and pay dates, reinvestment plans, splits and reverse splits, buybacks, rights issues, and the dilution that comes with secondary offerings.
It also works through spin-offs, the line between a merger and an acquisition, and defenses like the crown jewel strategy.
The throughline from IWP Concepts is mechanical: exactly how each event changes share count, valuation, and the value you hold.
Come away able to read any corporate announcement and know what happens to your position before the market reacts.
A dividend is a portion of a company's profit paid out to shareholders, authorized by the board of directors. It is one…
A Dividend Reinvestment Plan, or DRIP, automatically uses the cash dividends you receive from a stock to buy more…
A stock split is a corporate action that changes the number of shares outstanding and the price per share in lockstep,…
Four calendar dates define who receives a dividend and when the cash actually arrives: declaration, record,…
A share buyback is when a company uses its own cash to purchase its own shares, reducing the total shares outstanding.…
A rights issue is a capital raise in which a company offers its existing shareholders the right to buy new shares at a…
A secondary offering is a sale of a company's shares after its IPO. Strict usage splits it into two very different…
A spin-off is a corporate action where a parent company carves out a subsidiary or division and distributes shares of…
Mergers and acquisitions are the main ways public companies change hands. The terms are used interchangeably in the…
A tender offer is a public bid by an acquirer to buy shares directly from a company's shareholders at a stated price…
A proxy vote is how shareholders exercise their voting rights without physically attending a company's annual or…
A stock dividend is a distribution of additional shares to existing shareholders instead of cash. It looks like a…
A Material Adverse Change clause is a provision in a merger agreement that lets the acquirer walk away without paying a…
A go-shop period is a window written into a signed merger agreement that lets the target's board actively solicit…
A reverse termination fee is a payment the acquirer owes the target if the acquirer causes the merger to fail for…
A collar in a stock-financed merger is a contractual mechanism that adjusts the exchange ratio, the walk-away price, or…
Form S-4 is the SEC registration statement an acquirer files when it issues new shares to pay for a merger or…
A golden parachute is a compensation package that pays senior executives a large lump sum if their employer is acquired…
A poison pill, formally a shareholder rights plan, is a defensive measure that massively dilutes a hostile acquirer who…
An earnout is a portion of the purchase price in an M&A deal that is paid only if the target meets specified…
Two firms, Institutional Shareholder Services (ISS) and Glass Lewis, dominate the proxy advisory business and shape how…
A say-on-pay vote is a non-binding shareholder ballot item on the company's executive compensation program. It was…
Rule 14a-8 of the Securities Exchange Act is the mechanism that lets an eligible shareholder require a US public…
The universal proxy card is a single ballot listing every director nominee from both management and a dissident slate…
A Form S-1 registration is the document a US company files with the Securities and Exchange Commission to register…
A Form S-3 shelf registration lets an established public company register a pool of securities now and sell them in…
A Form S-4 merger registration is the SEC filing a company uses to register new shares it will issue to pay for a…
A Form S-8 employee stock registration is the short SEC filing a public company uses to register shares it plans to…
A Form S-11 REIT registration is the SEC filing used to register securities of real estate investment trusts and other…
Form 6-K is the report a foreign private issuer furnishes to the Securities and Exchange Commission to share material…
Form NT 10-K is the notice a public company files with the Securities and Exchange Commission when it cannot file its…
Form NT 10-Q is the notice a public company files with the Securities and Exchange Commission when it cannot submit its…
A DEF 14A proxy statement is the definitive document a public company files and sends to shareholders before they vote…
A PRE 14A preliminary proxy is the draft version of a proxy statement that a company files with the Securities and…
A DEF 14C information statement is a document a public company sends shareholders to inform them about a corporate…
Form 15 deregistration is the filing a company uses to suspend its obligation to report to the Securities and Exchange…
Form 25 delisting is the official filing that strikes a stock from a national exchange such as the NYSE or Nasdaq. It…
Form 8-A registration is the short filing a company uses to register a class of securities under the Securities…
Form 3 initial insider ownership is the first disclosure an insider files when they take on a reporting role at a…
A Form 4 insider transaction is the filing an insider makes whenever they buy, sell, or otherwise change their holdings…
Form 5 annual insider reporting is the yearly catch-up filing that captures insider transactions that were exempt from,…
A Form D Regulation D offering notice is the short filing a company submits to the SEC after raising money through a…
Accretion/dilution analysis is the quick test bankers run to tell whether an acquisition will raise or lower the…
Antitrust review is the process by which federal regulators screen mergers and acquisitions for potential harm to…
The Lintner model explains how public companies set their cash dividend each year. It says firms aim at a target payout…
A Rule 10b5-1 plan is a pre-set trading schedule that lets insiders or companies buy or sell stock without being…
The Modigliani-Miller (MM) theorem says that, under a specific set of idealized assumptions, the total value of a firm…
The trade-off theory says a firm picks its debt level by balancing the tax benefit of interest deductions against the…
Pecking order theory says firms finance new investment from retained earnings first, then debt, and only turn to equity…
The weighted average cost of capital (WACC) is the blended rate a firm pays on its debt and equity financing. It is the…
A cross-border M&A deal is a transaction in which the acquirer and the target are incorporated in different countries.…
A spin-off is a corporate separation in which a parent company distributes shares of a subsidiary directly to its…
A Dutch auction tender is a share buyback in which the company specifies a price range, invites shareholders to submit…
A proxy contest is a campaign by a dissident shareholder to win board seats or pass a non-binding resolution by…
Greenmail is the practice of a corporate raider building a stake in a target, threatening a hostile takeover, and then…
A poison pill, formally a shareholder rights plan, is a contractual instrument that massively dilutes any acquirer who…
A staggered board, also called a classified board, divides directors into separate classes that stand for election in…
A golden parachute is a contractual package of cash, equity acceleration, and benefits paid to a senior executive when…
A white knight is a friendly acquirer who steps in to buy a target company that is under hostile attack, on terms more…
The crown jewel defense is a takeover tactic in which the target sells, options, or otherwise transfers its most…
A Form F-1 foreign issuer IPO is the SEC registration statement an overseas company files to sell securities to the…
A Form F-3 foreign shelf registration is the short-form SEC filing a seasoned foreign private issuer uses to register…
A Form F-4 cross-border merger registration is the SEC filing a foreign private issuer uses to register securities it…
A Form 20-F foreign annual report is the yearly disclosure document a foreign private issuer files with the SEC to keep…
A Form 40-F Canadian issuer filing is the annual report that eligible Canadian companies submit to the SEC under the…
A Schedule 14D-9 recommendation is the SEC filing a target company's board makes in response to a tender offer for its…
A Schedule TO tender offer statement is the SEC filing a bidder makes to formally launch an offer to buy a company's…
A Schedule 13E-3 going private filing is the SEC disclosure required when a company or its affiliate takes a public…
A Schedule 13D activist filing is the report an investor must file after acquiring more than 5% of a public company's…
A Schedule 13G passive filing is the shorter beneficial ownership report used by large but passive holders who cross…
Form 13F institutional holdings reports are the quarterly disclosures that large money managers must file listing the…
A Form 13H large trader filing is the registration a person or firm must submit once their trading in U.S.…
A Form D amendment is an updated notice an issuer files with the SEC to keep an existing Regulation D private offering…
Form CB is a notice filed with the SEC when a company makes a cross-border tender offer, exchange offer, rights…
Form X-17A-5, known as the FOCUS report, is the standard financial and operational filing every US broker-dealer must…
Form ADV is the registration and disclosure document every investment adviser files to do business in the United…
Form CRS is a short, plain-English summary that broker-dealers and investment advisers must give retail investors. In…
Form PF is a confidential report that SEC-registered advisers to private funds file about the funds they manage. It…
Form N-1A is the registration document that mutual funds and most exchange-traded funds use to register their shares…
Form N-2 is the SEC registration document used by closed-end funds and business development companies. It is the…
Form N-CSR is the filing a registered fund uses to send its certified shareholder report to the SEC. It packages the…
Form N-PORT is the report that registered funds use to disclose their portfolio holdings to the SEC on a…
The Form N-MFP money market fund report is the monthly portfolio disclosure that every US money market fund must file…
The Form ATS-N dark pool disclosure is the public document a private trading venue must file with the Securities and…
The broker customer reserve formula is the calculation a brokerage firm uses to figure out how much customer cash it…
The large trader disclosure rule requires anyone whose trading in US-listed stocks and options crosses certain volume…
The broker-dealer bank push-out rules were a Dodd-Frank provision that tried to keep the riskiest swap dealing out of…
Regulation T customer margin is the Federal Reserve rule that limits how much a broker can lend you to buy securities.…
An SEC Wells notice is a letter telling someone the agency's enforcement staff has finished investigating and plans to…
An SEC no-action letter is the staff's informal promise that it will not recommend enforcement action against a…
The SEC comment letter review is how the agency checks public company filings for clear, accurate disclosure. Staff in…
An SEC confidential treatment request is how a company asks to keep sensitive information out of its public filings…