Eqvista has always worked towards bettering the customer experience. Fractional ownership is one such thing that Eqvista now supports. Whether you are a C-Corp, a private equity fund, or an LLC, you can now deal with your fractional shares on Eqvista. Fractional shares are a portion of a share that is less than a full share. Fractional share offers are upheld up to 8 decimal places. These types of shares are a result of a DRIPS, capital gains, or similar cooperation action.
Given below is a detailed explanation of a major way that results in the formation of fractional shares.
Mergers and acquisitions (M&A)
During a merger or acquisition, common stock is regularly joined utilizing a transformation ratio. The outcome might leave investors with fractional shares. Supporting fractional shares guarantees that no partners miss out on a piece of their stock during these occasions.
This is one of the major reasons why one can result in fractional shares. There are some firms that will split the whole share intentionally. This way they aim to sell the fractional shares to the customers. This type of share division is a common case with high-priced stock. An example of this will be Amazon, google’s parent company, etc.
Given below is an example of what fractional ownership looks like:
Given below is what your cap table will look like once you have fractional ownership.