How can we help?
Get Started
Funding & Withdrawal
Funding
Payment card errors
Transferring funds between Wall St and AUS
Funding timeframes
Funding mistakes
Funding fees
Maximum funding amounts
Unsupported funding methods
Direct USD deposits and withdrawals
Adding funds using debit or credit card
Adding funds using Google or Apple Pay
Adding and updating funding cards
Investing & Trading
Order types and execution
Trade confirmations
Fractional shares
Expiry instructions
Wall St trade settlement timeframes
Wall St brokerage fees
Wall St extended hours orders
Order types
Stake AUS limit orders
Stake AUS market orders
Stake AUS stop orders
Stake AUS trade settlement timeframes
Stake AUS brokerage fee
Buying and selling shares
Order types
Amending and cancelling orders
Trading hours and market calendars
Order rejections and halts
Instruments
Markets and rules
Wall St general regulatory requirements
Wall St pre-trade filters
Wall St regulatory fees
Stake AUS general regulatory requirements
Stake AUS pre-trade filters
Stake AUS minimum and maximum trade amounts
Cboe
Wall St pattern day trading
Market integrity: things to consider before placing orders
Wall St day trade counter
Wall St day trade calls
Portfolio Transfers
Incoming Portfolio Transfers
Outgoing Portfolio Transfers
Rewards
Portfolio Transfer Reward
Referral Reward
Products & Features
Stake Super
Setting up your SMSF
Super Transfer
Investing with your SMSF
SMSF Management
Insurance
Employer & Personal Contributions
SMSF Fees
Tax
Documentation & Reporting
About Stake Super
Stake Accumulate
About the Stake Accumulate Fund
Investing & managing your investment
Performance updates & statements
Risks, policies & compliance
Account Management
Documents & Statements
Privacy & Security
About Stake
Stake's Mission
Regulatory & Partners
Contact Stake
Consideration types
What is consideration in a corporate action?
‘Consideration’ refers to what you receive in exchange for your existing shares during a corporate action – typically cash, shares or a mix of both. While most common in mergers and acquisitions (M&A), it can apply to other events that change the structure of your investment.
Here’s a breakdown of when consideration applies, what it means for your holdings, and what to do next.
When consideration applies
Corporate action |
Why consideration applies |
Action type |
|---|---|---|
Mergers & acquisitions (M&A) |
Your company is acquired. You receive payment for your shares – in cash, stock or both. |
Mandatory |
Tender offers / share buybacks |
A company (or third party) offers to buy back shares from you at a set price. |
Voluntary |
Spin-offs |
A business division is separated into a new, publicly traded company. |
Mandatory |
Conversions of securities |
Convertible securities (e.g. preferred shares or bonds) are exchanged for common stock. |
Voluntary |
What this means for your securities
Corporate action |
Form of consideration |
Impact on your original shares |
|---|---|---|
M&A (all-stock) |
Shares in the acquiring company |
Your shares are swapped for new ones at a set ratio. |
M&A (all-cash) |
Cash |
Your shares are cancelled and removed from your account. |
M&A (stock & cash) |
Shares in the acquiring company plus cash |
The nominated shares are swapped for new ones at a set ratio. The remainder are cancelled when the cash consideration is paid. |
Tender offer |
Cash or alternative securities |
Shares you tender are bought and cancelled. |
Spin-off |
Shares in the new company (in addition to existing) |
Your original shares drop in value, and you receive new shares. |
Conversion |
Common stock |
Your convertible security is exchanged and cancelled in favour of common shares. |
What you need to do
Your next step depends on whether the corporate action is mandatory or voluntary:
Action type |
What happens |
Your next step |
|---|---|---|
Mandatory |
Stake’s broker processes the exchange automatically. |
No action needed – check your account for new shares or cash once processed. |
Mandatory with choice |
You’re offered a choice (e.g. cash vs shares). |
Submit your election form before the deadline, or the default option applies. |
Voluntary |
You choose whether or not to participate. |
Actively instruct the broker if you wish to take part, otherwise nothing changes. |
Tax considerations
Receiving cash as consideration – such as in an all-cash merger or a tender offer – can trigger a capital gains tax event. We recommend speaking with a tax professional to understand how it may affect your individual situation.
Important
Please note that corporate actions are decisions made solely by the issuing company and are outside of Stake’s control. While we facilitate and process these actions on your behalf, all details and timing are determined by the company.
Did you find this helpful?