Skip to content
Know.itKnow.it
Create an animated lesson
On request

This article is free to read. Creating a lesson uses your daily or stored credits; review the language and settings before starting.

What is a stock split?

FinanceLesson on requestFree to read

Quick answer

A stock split is when a company divides its existing shares into more shares, lowering the price of each without changing the company's total value. A 2-for-1 split, for example, doubles your shares but halves each one's price — often done to keep shares affordable.

Key things to understand

  1. A company splits each share into multiple shares.
  2. The price per share drops proportionally.
  3. Your total holding's value stays the same.
  4. It's often done to keep share prices accessible.

People also ask

What is a stock split?
When a company divides its shares into more, lower-priced shares without changing total value.
Does a stock split make me richer?
No — you own more shares at a proportionally lower price, so your total value is unchanged.
Why do companies split their stock?
Often to keep the share price affordable and accessible to more investors.