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Finance

What is A stock split?

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.

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Key things to understand

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

Frequently asked questions

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.

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