Stock Split

Category: finance

A corporate action where a company increases the number of its outstanding shares by issuing more to shareholders.

A split is a "psychological adjustment." If you own one share at $100 and a 2-for-1 split occurs, you now own two shares at $50 each. The total value remains the same, but the stock becomes more "accessible" to smaller retail investors.

Common Examples

• The board announced a 4-for-1 stock split to lower the share price and increase liquidity for retail traders.
• A stock split does not change the fundamental market capitalization, but it often increases trading volume due to the lower entry price.