What is a corporate action?

A corporate action is any event that changes something about a company or a security and can affect shareholders. Some actions are mandatory (you don’t need to do anything; the market processes them automatically). Others are voluntary (you choose whether to take part). Below are the most common examples and what they mean in practice.

Dividend distributions (cash or stock)
A cash dividend is money paid to shareholders from company profits. You become eligible if you hold the shares before the ex-dividend date; payment arrives on the pay date. A stock (scrip) dividend pays additional shares instead of cash. Either way, the company’s total value doesn’t change because of the dividend itself; market moves can still affect prices.

Stock splits (and reverse splits)
A stock split increases your number of shares and lowers the share price by the same factor (e.g., 2-for-1 converts 100 shares at €20 into 200 at €10). A reverse split does the opposite. Your total position value is unchanged at the moment the split happens (ignoring market moves). Fractional entitlements may be rounded or paid as cash depending on market rules.

Rights issues
In a rights issue, existing shareholders get the right to buy extra shares—usually at a discount—for a limited time. Key dates include the record date (who qualifies) and the subscription deadline (last day to act). You can usually (a) take up your rights by paying the subscription amount, (b) sell/renounce them if they’re tradable, or (c) let them lapse.

Spin-offs
A spin-off is when a company separates part of its business into a new, independent company. Shareholders of the parent typically receive shares in the new company based on a set ratio. After the spin-off, the two companies trade separately.

Name or trading symbol (ticker) changes
Companies sometimes change their legal name or ticker (for example, after a rebrand or reorganisation). This does not change the number of shares you hold or, by itself, the value of your investment.