A stock split is when a company increases the amount of its shares in the market. Existing shareholders are given proportionally more but less valuable shares. This means that in theory, whilst you now hold more shares, the value of your investment remains the same.
For example, a 5 for 1 stock split would mean that shareholders would receive 5 new shares for every 1 share they owned. So, if a shareholder owned 5 shares pre-stock split, they would own 25 shares post-stock split and the overall value would be the same.
How will shareholders be affected?
If you own shares in a company subject to a stock split, you should receive a message to let you know when the stock split will happen and what will happen to your current holding.
Any newly created shares you are due to receive will be added to your portfolio.
Any entitlement to shares may be rounded down to the nearest whole share, in which case you would receive a cash payment for any fractional share entitlement. Alternatively, your shares may be issued including a fraction of a share, up to 8 decimal places.
Once the corporate action has been processed and your portfolio has been adjusted accordingly, you will receive a confirmation message in-app. Due to our current corporate action process, any cash in lieu or newly received shares will not appear as an item in your Activity feed, but will be added to your account.