In a stock split, each existing share is divided into more shares and the price adjusts downward in proportion. A two-for-one split turns one share at 200 into two shares at about 100. Your total holding value stays roughly the same at the moment of the split; only the packaging changes.
Key takeaways
- Splits change share count and price, not the company’s fundamental value overnight.
- They can make shares feel more affordable in whole-share trading systems.
- A reverse split reduces the number of shares and raises the price per share.
- Do not confuse a split with a dividend or a free gift of wealth.