Stock Split

Definition

An increase in a company's share count that proportionally reduces the price per share. A split by itself does not change a shareholder's ownership percentage or the overall value of the holding.

A split changes the number of shares each investor holds by the same proportion. The share price adjusts mechanically when the split takes effect, leaving the position worth about the same at that moment. Subsequent price moves reflect trading after the adjustment.

Example

In a 2-for-1 split, one $100 share becomes two shares worth about $50 each at the time of the split.