Stock split

A stock split increases the number of a company's outstanding shares by issuing additional shares to every existing shareholder, without changing anything about the underlying business. A 2-for-1 split, for example, doubles the share count while roughly halving the price per share, leaving the total value of an investor's holding unchanged.

Companies typically do this when a high share price makes a single share expensive or unwieldy for smaller investors, wanting a lower, more accessible price without giving away any actual value. A split has no effect on a company's revenue, profit, or total market value, since dividing the same value into more pieces changes the price per piece, not the whole.

A reverse stock split works the opposite way, reducing the number of shares outstanding and raising the price per share proportionally, often used by a company whose share price has fallen very low, sometimes to avoid being delisted from an exchange for trading below a minimum required price.