Stock Splits

A stock split increases the number of shares outstanding while proportionally lowering the price per share, leaving the total value unchanged. A 2-for-1 split, for example, doubles your share count and halves the price. Companies often split to keep the share price in a range that feels accessible to investors.

Treat a split as cosmetic, not a reason to buy, since it does not change the company value or your ownership stake. It can modestly improve liquidity and let smaller investors buy whole shares. A reverse split does the opposite, reducing share count and raising the price, sometimes to meet exchange listing requirements.

If you own 10 shares worth 300 dollars each, a 3-for-1 split gives you 30 shares worth 100 dollars each. Your total stays at 3,000 dollars; only the number and price of shares changed.