Voting rights
You may not have voting rights if you own fractional shares.
Dividends
Fractional shareholders are entitled to dividend payments based on the number of shares they own.
Corporate actions
In reverse splits or mergers and acquisitions, clients will receive cash-in-lieu for the fractional portion of the resulting shares. For example, if you owned 2.5 shares of XYZ, and there was a 1-for-2 reverse split, you would end up with 1 share of XYZ plus cash-in-lieu for 0.25 share.
In the case of forward splits, spinoffs, or stock dividends, clients will receive cash-in-lieu for the fractional portion of the additional shares. For example, if you owned 2.5 shares of XYZ, and there was a 2-for-1 forward split, you would end up with 4.5 shares of XYZ (2.5+2) plus cash-in-lieu for 0.5 share.
Account transfers
Fractional shares cannot be transferred to another brokerage firm. If you decide to transfer your account, you will need to liquidate the fractional positions in your account before initiating the transfer.
Still got questions? Contact TradeUP Customer Support by email at support@tradeup.com or reach out to us on Live Chat!