Corporate Actions

Stock Splits

Stock splits simultaneously increase the number of shares available for purchase and decrease the price. The total market value of the trading shares remains the same.

Reverse Splits

A company might decide to increase its stock's price through a reverse split. In a two-for-one reverse split, the number of shares is cut in half while the price increases proportionately.

Buy Backs

Just as it can issue additional shares, a company can repurchase, or buy back, shares of its stock. When a company repurchases shares, it takes them out of the secondary market and increases each shareholder's relative stake in the company.

Rights Offering

If a corporation issues new shares, it must give existing shareholders the first opportunity to purchase new shares. This is called a Rights Offering.

Warrants

A warrant gives the stockholder the right to purchase stock from the issuer at a specific price within a certain time frame. Warrants are similar to rights, but typically have a longer time horizon, usually measured in years.

Reorganizations

Common reorganizations include mergers & acquisitions and bankruptcy.