Equity

GDR Issuance The process of creating global depositary receipts, allowing a foreign company to trade its shares internationally without listing on multiple exchanges.

GDR Listing Listing of Global Depositary Receipts on international exchanges, expanding investor access to foreign equities.

GDR vs ADR: How Global and American Depositary Receipts Differ A GDR vs ADR comparison reveals differences in listing venue, investor access, regulatory burden, and issuer strategies for cross-border stock access.

Global depositary receipt A global depositary receipt (GDR) is an international security representing shares of a company that trades in capital markets outside the US, enabling investors worldwide to own foreign stock.

Going-Private Transaction A buyout that removes a company from public markets, extinguishing shareholder voting rights and ending SEC reporting obligations.

Going-Private Transaction A transaction in which a company buys back all publicly held shares and delists from a stock exchange, converting from a public to a private company.

Golden share A golden share is a single share or small class of shares granted special rights to block or approve certain corporate actions, often used by governments or founders to maintain veto power.

Golden Share and Veto Rights Golden share and veto rights: how a single special share grants government or founder veto power over major corporate decisions in public companies.

Golden Share: Definition and Uses A golden share definition explains the special veto shares governments retain in privatised companies, blocking hostile takeovers and foreign control.

Grant Date Price The fair market value of a company's stock on the date an equity award is issued to an employee, which determines the tax basis and exercise price for that grant.

Grant-to-Vesting Gap The lag between when equity is approved and when it actually vests, creating tax and valuation uncertainty.

Greenshoe Option Explained What a greenshoe option is, how underwriters stabilize IPO share prices, and why companies grant overallotment rights.

Greenshoe Option in an IPO Explained The greenshoe option lets IPO underwriters buy extra shares to stabilize the stock price above the offering price in the first weeks.

Holding ADRs in an IRA Account ADRs held in IRAs cannot reclaim foreign withholding taxes via foreign tax credits, making them less tax-efficient than holding them in taxable accounts.

How a Secondary Offering Affects Stock Price Secondary offerings typically depress share price on announcement due to dilution and signaling effects, though recovery patterns vary by company strength and capital use.

How a Stock Split Affects Earnings Per Share Why EPS changes mechanically after a stock split—adjusting both the numerator and denominator—even though the company's actual earnings don't change.

How a Stock Split Affects Options Contracts When a stock splits, exchange rules automatically adjust options strike prices and contract multipliers so positions remain equivalent in economic value.

How a Stock Split Affects Shareholders Stock split mechanics: how forward and reverse splits change share count and price without altering total equity value.

How a Tender Offer Works for Employee Stockholders Learn how a tender offer affects employees with company stock, including eligibility, proration, timing, and tax consequences.

How ADR Conversion Works Converting an ADR to ordinary shares means redeeming the receipt with the depositary bank and receiving the underlying foreign stock.

How an Employee Stock Purchase Plan Works Employee Stock Purchase Plan mechanics: offering periods, discount rates, lookback windows, and tax treatment for employees who buy employer shares.

How Classified Boards Interact with Share Class Structures Classified board and share class interaction: staggered boards reinforce dual-class voting power and create a powerful dual-layer takeover defense.

How Companies Draw Down a Shelf Registration The mechanics of shelf registration drawdowns: how issuers bring pre-approved securities to market quickly using pricing supplements and effective registration statements.

How Corporate Actions Are Handled on Depositary Receipts Corporate actions like stock splits, rights issues, mergers, and spin-offs flow through depositary receipts; outcomes depend on the agreement and the underlying foreign company's choice.

How Proxy Voting Works for Retail Investors End-to-end process for retail investors: receiving proxy materials, understanding ballots, and casting votes before shareholder meetings.

How Retail Investors Get IPO Allocations How do retail investors get IPO shares? Explore brokerage platforms, directed share programs, and Reg A+ offerings for individual IPO access.

How Share Buybacks Increase Earnings Per Share Share buybacks reduce outstanding shares, raising earnings per share even when net income is unchanged—a mechanical effect distinct from genuine value creation.

How Share Class Conversion Works Share class conversion mechanics: how preferred shares convert to common automatically at IPO or by holder election, including conversion ratios and anti-dilution adjustments.

How Share Dilution Affects Existing Shareholders Share dilution reduces existing shareholders' ownership percentage, EPS, and book value per share when a company issues new equity.

How Stock Options Are Taxed: ISOs vs NQSOs Tax treatment differs sharply between incentive and non-qualified stock options, with different events at grant, exercise, and sale—and potential AMT exposure.

How the ESPP Discount Is Taxed How the ESPP discount between grant price and market price is split into ordinary income and capital gains tax based on holding period.

How to Allocate Cost Basis After a Spin-Off When a company spins off a subsidiary, the IRS requires splitting the original cost basis between parent and spun-off shares using fair market value on the distribution date.

How to Value a Startup Equity Offer Value a startup equity offer by estimating ownership percentage, dilution risk, and potential exit scenarios. Learn the framework for private equity appraisal.

Incentive stock option An incentive stock option (ISO) is an employee stock option that qualifies for preferential tax treatment under US tax law, allowing long-term capital gains rates on exercise gain if holding periods are met.

Indian Depositary Receipt A security enabling foreign companies to raise capital from Indian investors by depositing shares with an Indian custodian.

Information Rights Shareholder access to financial data, operational disclosures, and company information needed to make informed voting and investment decisions.

Inspection Rights Statutory right enabling shareholders to examine a corporation's books, records, and shareholder lists upon written demand.

IPO Allocation: Retail vs Institutional Investors How IPO shares are allocated between retail and institutional investors, and why institutions typically receive the bulk of shares.

IPO First-Day Pop: Causes and Patterns Why IPOs pop on first day: demand, information asymmetry, and underwriter incentives that drive characteristic price surges in new listings.

IPO Lock-Up Expiry Effect on Stock Price Why stock prices often dip when IPO lock-up agreements expire, what insiders typically do, and what investors should know before that date.

IPO Pricing Mechanism How underwriters set the final public offering price from the bookbuild range, balancing demand and company valuation.

IPO Quiet Period Rules What happens during the SEC-mandated quiet period after an IPO, what underwriters and insiders cannot say, and why the restriction exists.

IPO Share Flipping IPO share flipping is the practice of selling shares immediately after a company's initial public offering, often at a quick profit, which underwriters discourage through penalty bids.

IPO Underpricing: Why New Issues Are Priced Below Market Value Why underwriters systematically underprice IPOs, leaving money on the table at issuance—and how asymmetric information, risk, and incentives drive the pattern.

ISO Holding Period The two-year-from-grant, one-year-from-exercise rule required to achieve long-term capital-gains tax treatment on incentive stock options.

ISO Qualifying Disposition Requirements To receive long-term capital-gains treatment on ISO stock sales, holders must satisfy two holding-period tests. Learn how the timelines and thresholds work.

ISO Spread at Exercise and the AMT Preference Item How the bargain element on incentive stock option exercise becomes an alternative minimum tax preference item and creates a tax liability.

ISO vs NQSO When Leaving a Company How ISO and NQSO exercise windows and tax treatment differ when you resign, get fired, or leave your employer. The 90-day rule and what happens to unvested shares.

Issued vs Outstanding Shares Issued shares are those sold or granted; outstanding are issued shares still held by public shareholders, excluding treasury repurchases.

Junior Preferred Stock A class of preferred shares with lower priority in distributions and liquidation than senior preferred, but still above common shareholders.

Level 1 ADR American Depository Receipt traded over-the-counter with minimal regulatory disclosure and no listing requirements.

Level 2 ADR American Depositary Receipt listed on a major US exchange, subject to higher disclosure requirements than OTC level 1 or level 3.

Level 3 ADR American Depository Receipts issued for capital raises with full SEC registration and free trading rights.

Liquidation The process of dissolving a company by selling its assets, paying liabilities, and distributing remaining value to shareholders.

Liquidation Preference The order in which security holders are paid in bankruptcy, restructuring, or acquisition; determines how proceeds are distributed.

Liquidation Preference Multiples on Preferred Stock Liquidation preference multiples (1x, 2x, 3x) define how much preferred stockholders receive relative to their original investment when a startup exits or liquidates.

Liquidation Preference on Preference Shares Explained Liquidation preference on preference shares: 1x non-participating vs participating, multiple preference mechanics, and exit payout examples at different valuations.

Liquidity Risk in Depositary Receipts Depositary receipt liquidity risk arises from thin trading and wide bid-ask spreads, especially for emerging-market ADRs and GDRs with small float.

Lock-up period A lock-up period is a contractual or regulatory restriction preventing insiders (founders, employees, early investors) from selling their shares for a specified time, typically six months post-IPO.

Lock-Up Waiver Discretionary release by underwriters of post-IPO trading restrictions on insider shares before the lock-up period expires.