Corporate actions
A corporate action in investing refers to any event initiated by a company's management that brings about a significant change to the company’s securities and affects its stakeholders, such as creditors and shareholders. These actions can impact stock prices, liquidity, and overall company performance. There are two types of corporate actions: voluntary and mandatory.
Voluntary corporate actions: Require a response from the investor - such as a vote for or against where investors may need to respond online or over the phone. Examples include:
- Equity tender offers
- Bond tender offers
- Exchange offers
- Rights offers
- Consent solicitations
Mandatory corporate actions: Don’t require any action from the investor as participation is obligatory, meaning the company’s board of directors (not the shareholders) approves the action. Examples include:
- Spin-offs
- Stock splits (both forward and reverse)
- Mergers and acquisitions
- Name or trading symbol changes
- Dividend distributions
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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