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In investing, what is a stock split?
In investing, what is a stock split?
Dimitris avatar
Written by Dimitris
Updated over a week ago

A stock split divides the value of shares in a given company.

In the example of a two-for-one stock split, an investor who previously owned one share in the company would own two shares after the split, each now worth exactly half the price of the original share that they owned.

A stock split results in a decrease in the market price of individual company shares, whilst not affecting the market capitalization of the company or diluting the stock.

When a stock split occurs, it can indicate that a company is performing well and that the stock price has increased as a result. A stock split makes shares more affordable and can make them more enticing for investors.

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