Corporate actions are events initiated by a public company that impact the underlying stock, such as splits, reverse splits, ticker changes, mergers & acquisitions, delistings, dividend payments, and spinoffs. Because Robinhood Stock Tokens mirror the price of the underlying stock, corporate actions impacting that stock will also impact your stock tokens. For more details on how specific corporate actions are handled, you can view a corporate actions tracker.

Common types of corporate actions you might encounter include:

• Stock splits: A company divides its existing shares into multiple shares (e.g., a 1:3 split means for every 1 token you held, you would hold 3 after the split).
• Reverse stock splits: A company combines multiple existing shares into fewer shares (e.g., a 3:1 reverse split means for every 3 tokens you held, you would hold 1 after the split).
• Ticker changes: The trading symbol for a stock changes (e.g., Facebook’s ticker symbol changed from FB to META).
• Mergers & Acquisitions (M&A): 2 companies combine. This can result in various outcomes for shareholders of the acquired company, such as receiving cash or shares in the new entity.
• Spin-offs: A company separates a division or subsidiary into a new, independent company.
• Delisting: A stock is removed from an exchange. Since Robinhood does not allow trading of stocks on OTC (Over-the-Counter) markets, a delisting for us means we will liquidate the position.
• Liquidations: A company winds down its operations and distributes its remaining assets to shareholders.
• Dividend payments: A company distributes a portion of its earnings to shareholders.

• Position adjustments: For actions like stock splits, reverse splits, ticker changes, or spin-offs, your quantity of stock tokens may be automatically adjusted in your account to reflect the change in the underlying stock.
• Cash distributions: For actions like mergers, acquisitions, liquidations, or delistings, you may receive a cash distribution in euros based on the event.
• Dividends: Cash dividends will be handled automatically. You receive dividend payments in euros, and they appear in your transaction history as a cash distribution. FX conversion fees do not apply to dividend payments. There may be tax withholding depending on your region. Consult a tax professional for specific guidance.
• Average cost: Some average cost calculations may not calculate correctly for new shares or they may be delayed.

We will temporarily prevent you from trading the affected stock tokens while the Corporate Actions team works to process these changes.

• Placing a new order is typically unavailable during corporate action processing. In most cases, trading is unavailable from the early morning on the effective date (around 2 AM CET/CEST) and resumes once processing is complete, typically by the start of the US market day (around 3:30 PM CET/CEST).
• During a corporate action, all open orders for that stock token will be canceled.
• In rare cases, such as during a delisting or liquidation, we will only allow you to place sell orders for that specific stock token. Buy orders would not be permitted, and any pending buy orders would be canceled.

Robinhood provides notifications in the app to keep you informed about corporate actions affecting your stock tokens:

• Banners: A banner will typically appear at the top of the Stock Token Detail Page (STDP) for an affected asset to notify you that a corporate action is in progress, trading is temporarily unavailable, and data updates may be delayed.
• Pop-ups: If you attempt to place an order during a trading halt, a pop-up message will appear with similar information to the banner, explaining that trading is temporarily unavailable.
• History: For certain actions like dividends and forward and reverse splits, a corresponding history item showing the adjustment will appear in your account history.