A stock split increases the number of shares a company has outstanding while proportionally lowering the price of each one, so the total value of your holding does not change. It is like getting change for a $20 bill in two $10s — you have more pieces, but the same amount of money.
Example (illustrative): you own 10 shares worth $600 each — $6,000 in total. In a 3-for-1 split, each share becomes three, so you now hold 30 shares. The price adjusts to $200 each, and your total is still 30 × $200 = $6,000. Nothing about the company's value changed; only the share count and per-share price did.
The usual reason is to bring a high share price down to a level that feels more accessible to small investors. Because the underlying business is unchanged, a split does not by itself make a stock a better or worse investment — the market capitalization (price × share count) is identical the moment before and after. A reverse split does the opposite: fewer shares at a higher price, sometimes used to lift a very low price back above an exchange's minimum.
Split-adjusted price history is why a chart doesn't show a sudden cliff on the split date — historical prices are restated so the series stays continuous. Per-share metrics like earnings per share also rescale with the new share count. None of this is investment advice.
No. You own more shares, but each is worth proportionally less, so your total value is unchanged at the moment of the split. The company's market capitalization is identical before and after.
Usually to lower a high share price to a level that feels more accessible to small investors. It is largely cosmetic — the underlying business is the same.
The opposite of a normal split: the company reduces the share count and raises the per-share price proportionally, sometimes to lift a very low price back above an exchange's listing minimum.
Browse all S&P 500 tickers to see this metric applied to individual companies.
Educational research only — not investment advice.