A stock split is a process that divides the value of shares in a company.
In a typical scenario, like a two-for-one stock split, an investor who initially owned one share in the company would possess two shares after the split, with each new share having a value that is exactly half of the price of the original share.
A stock split leads to a reduction in the market price of individual company shares, without affecting the company's overall market capitalization or diluting its stock.
When a stock split occurs, it often signals that a company is performing well and that its stock price has risen.
This, in turn, makes shares more affordable and appealing to potential investors.