Equity

Standstill Agreement in Equity Offerings Standstill provisions restrict major shareholders or acquirers from purchasing additional shares for a set period after a placement or offering.

Stapled Securities Two or more securities legally bound together and traded as a single unit, common in Australian listed investment trusts and real-estate structures.

Statutory Merger A legal transaction where one company is absorbed by another, ceasing to exist as a separate entity under corporate law.

Stepped Preferred Stock Preferred shares with a dividend that increases in steps at predetermined dates, allowing the issuer to defer higher coupons into the future.

Stock A stock is a unit of ownership in a public company. Owning a share entitles you to a slice of the company's profits, a vote in its decisions, and a claim on what is left over if it is sold or wound up.

Stock Appreciation Rights An equity award that grants the right to receive cash or shares equal to the appreciation in stock price above a fixed exercise price, without requiring the employee to purchase shares.

Stock dividend A stock dividend is a distribution of new shares to shareholders in proportion to their existing holdings, increasing share count while reducing the per-share price.

Stock Dividend A dividend paid to shareholders in the form of new shares of common stock rather than cash, reducing retained earnings and increasing the share count.

Stock Float Shares outstanding available for public trading, excluding restricted holdings and insider stakes.

Stock Option Exercise Strategies Stock option exercise strategies—exercise and hold, exercise and sell, cashless exercise, early exercise—each carry different tax consequences and risk profiles.

Stock Option Plan The master contract and corporate authorization that governs how a company issues employee stock options, including vesting rules, exercise windows, and tax treatment.

Stock Options and the IPO Lock-Up Period IPO lock-up periods typically restrict insiders from selling shares for 180 days post-listing. Employees with options face tax and liquidity timing challenges during lock-up.

Stock Recapitalization A corporate action in which a company creates new classes of stock or restructures its existing stock classes to change voting rights or economic terms.

Stock Split A corporate action in which a company divides each existing share into multiple shares, reducing the per-share price while keeping the total market capitalization constant.

Stock Split Eligibility: When and Why Boards Approve One The share-price thresholds, index-inclusion rules, and strategic reasons that trigger a company's decision to declare a forward stock split.

Stock Split Ratio: How Share Count and Price Adjust How to calculate stock split ratio: 2-for-1, 3-for-1, and other splits divide par value and adjust share price while keeping market cap constant.

Stock Split vs Reverse Split: Investor Impact Compared Stock splits and reverse splits mechanically divide or consolidate shares, but differ in signaling: forward splits suggest confidence; reverse splits often signal distress.

Stock-Based Compensation Expense How companies measure and record option and RSU costs on the income statement under ASC 718.

Stock-for-Stock Merger Tax Treatment for Shareholders Understand how stock merger tax treatment works under Section 368, when gains are recognized, and what happens to shareholder cost basis in all-stock mergers.

Street Name Shares and Shareholder Rights Street name shares are held by brokers on your behalf. Learn which shareholder rights transfer automatically and what requires direct action.

Stub Equity The residual equity interest left in a company after a leveraged buyout or major asset sale, typically held by the original owner.

Sunset Provision A charter clause that automatically converts super-voting shares to one-share-one-vote after a specified trigger event, limiting founder entrenchment.

Super-Voting Shares Shares that carry disproportionately high voting rights—multiple votes per share—allowing a founder or insider to maintain control despite owning a minority stake.

Super-Voting Shares at IPO: The Controversy Why institutional investors and governance bodies oppose supervoting shares at IPO. Dual-class structures, 10:1 vote ratios, and stock exchange sunset rules explained.

Super-Voting Shares Explained Super-voting shares carry 10:1 or higher voting ratios, giving founders control even as equity stakes dilute. How they work and what ordinary shareholders need to know.

Supermajority Provision A charter clause requiring more than 50% shareholder approval for specific decisions, typically used to block hostile takeovers or major changes.

Tag-Along Option A minority shareholder right allowing them to sell their shares proportionally when a controlling shareholder exits a company.

Tag-Along Rights A contractual provision allowing minority shareholders to sell their shares on the same terms when majority shareholders sell to a third party, protecting minorities from adverse transactions.

Takeover Premium: Definition and Calculation How to calculate the takeover premium as a percentage of pre-announcement stock price to assess acquisition offer fairness.

Tender Offer A public or private invitation for shareholders to sell or exchange their shares at a specified price within a set timeframe.

Tender Offer Minimum Condition Explained Tender offer minimum condition: the threshold clause allowing a bidder to walk away if fewer shareholders accept the offer than required.

Tender Offer vs Open-Market Buyback Tender offer vs open-market buyback: fixed-price tender offers are quick and signal conviction, while open-market programs offer flexibility and lower messaging risk.

Theoretical Ex-Rights Price (TERP) Explained Understand how to calculate theoretical ex-rights price when a company issues rights to existing shareholders and when the stock trades ex-rights.

Tracking Stock A share class whose performance is pegged to a specific operating division or subsidiary rather than the consolidated company's overall results.

Tracking Stock Explained Tracking stock explained: how it ties shareholder returns to a specific business unit's performance without forming a separate legal entity.

Trading Options on ADRs Learn how options on ADRs work, which depositary receipts have listed options, and how depositary ratios affect contract specifications.

Transfer agent A transfer agent is a financial institution that maintains a company's shareholder registry, handles share transfers, manages dividend distributions, and processes stock issuances and buybacks.

Treasury Shares Shares that a company has issued and later repurchased from the market, held in the company's treasury and not in active circulation.

Treasury stock Treasury stock is shares of common or preferred stock repurchased by the company and held in its own treasury, reducing shares outstanding and earnings-per-share mechanically without changing business value.

Treasury Stock Mechanics How companies acquire and hold their own shares, affecting capital structure, earnings per share, and shareholder rights.

Triangular Merger An acquisition structure where the acquirer creates a subsidiary to absorb the target, insulating the parent from the target's liabilities.

Trust Preferred Securities Hybrid instruments issued by a bank-sponsored trust that combine debt tax treatment with Tier 1 capital credit, blurring the line between debt and equity.

Underwater Option A stock option whose current stock price is below the exercise price, making it worthless to exercise at that moment, though it retains value if the stock price recovers.

Underwriter Spread in an IPO How the underwriter spread is calculated in IPOs: the gross spread splits into management fee, underwriting fee, and selling concession.

Universal Proxy Card: What It Means for Shareholders The SEC's universal proxy card rule lets shareholders mix and match director nominees from rival slates in proxy contests, upending traditional takeover dynamics.

Unsponsored ADR Depositary receipt issued without the foreign company's participation or approval.

Uplisting from OTC Markets to Nasdaq or NYSE How to uplist from OTC to Nasdaq: companies must meet exchange listing standards, including financial thresholds, governance rules, and filing requirements with the SEC.

Vesting Cliff An initial period during which no equity vests at all, followed by a trigger date when a tranche (typically 25%) vests instantly, creating a discontinuous vesting schedule.

Vesting Restricted Stock Shares issued with transfer restrictions that lapse as the recipient meets vesting conditions, typically time-based employment over several years.

Vesting schedule A vesting schedule is the timeline over which an employee or founder's equity grant converts from restricted to unrestricted ownership, aligning incentives for long-term service.

Voting Rights Shareholder voting power in corporate elections, proxy contests, and major decisions.

Voting Rights Equity Shareholder power to vote on corporate decisions, including board elections, mergers, and significant policy changes.

Voting Trusts as a Share Control Mechanism How voting trusts consolidate shareholder voting control through a trustee, and when companies and founders use this mechanism to maintain governance power.

Warrant A warrant is a security giving the holder the right to purchase shares of the underlying company at a fixed price within a specified period, similar to a long-dated option.

Warrant Exercise as a Corporate Action How warrant exercise works as a corporate action: mechanics, dilution, notice periods, and shareholder impact.

Warrant Offering The issuance of standalone securities giving investors the right to purchase shares at a fixed price, independent of an existing bond or preferred stock.

What Happens to Preferred Stock in a Merger or Acquisition Understand how preferred stock is treated in a merger or acquisition — cash-out, conversion, or rollover options.

What Happens to Preferred Stock in Bankruptcy What happens to preferred stock in bankruptcy: liquidation waterfall order, recovery rates, and where preferred holders stand relative to debt and common equity.

What Happens to Unvested Equity in an Acquisition What happens to unvested equity in an acquisition: understanding assumption, acceleration, and cancellation of equity grants after a company is acquired.

What Happens to Your Equity When You Leave a Company Post-termination rules for stock options, RSUs, and restricted stock, including exercise windows, forfeiture timelines, and tax consequences.