A share consolidation, also known as a reverse stock split, is when a company reduces the amount of its shares in the market.
Any existing shares are consolidated into proportionally fewer but more valuable shares. This means that in theory, whilst you now hold fewer shares, the value of your investment remains the same at the effective time.
For example, a 1 for 5 share consolidation would mean that shareholders would receive 1 consolidated share for every 5 shares they owned. So that if a shareholder owned 25 shares pre-consolidation, they would own 5 shares post-consolidation and the overall value would be the same.
How will shareholders be affected?
If you own shares in a company subject to a consolidation, you should receive a message to let you know when the consolidation will happen and what will happen to your current holding.
Your pre-consolidated shares will be removed from your portfolio and replaced with the newly consolidated shares.
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.