Investing Basics

What Is a Stock Split?

A stock split is when a company increases its number of shares by dividing each existing share into multiple shares, lowering the price per share proportionally. In a 2-for-1 split, each share becomes two shares at half the price, so the total value of a shareholder’s position stays the same.

Example

100 shares at 200 (worth 20,000) become 200 shares at 100 after a 2-for-1 split — still worth 20,000.

Reverse Splits

A reverse split combines shares, for example 1-for-10, raising the price per share while reducing the number of shares.

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Stock Market Capitalization Cost Basis

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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.