By capitalcom
Publication Date: 2025-12-23 14:30:00
Past performance is not a reliable indicator of future results.
What is a stock split?
A Stock split Increases a company’s number of outstanding shares by splitting each existing share into several new shares. Although the number of shares increases, the price per share adjusts downward in proportion to the split. The company’s total market capitalization remains the same at the time of the split and the value of an investor’s total holding does not directly change as a result.
For example, in a 2-for-1 split, each shareholder receives two shares for every share they own. The share price typically settles at around half of its previous level. The underlying business doesn’t change; Only the number and price of its shares are important.
Companies may use forward stock splits to maintain their stock price in a range they deem accessible to a broad investor base or to support liquidity. A reverse split does the opposite by consolidating shares to increase the price per share.
