Stock Split

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A stock split is the point at which an organization separates the current portions of its stock into various new shares to support the stock’s liquidity, by making the share price much lower and more affordable for smaller investors. Even though the quantity of shares outstanding increases by a particular number, the complete dollar value of the shares remains as before, for the split does not add any genuine worth to the stock value.

how a stock split works

split. As shown in the above illustration, apple’s initial shares were valued at $200, in this case, there was a 4-for-1 split, hence apples post-split shares are now valued at $50.

On the other hand, reverse stock splits are respectively quite the opposite, where as an organization divides, rather than duplicates, the quantity of shares that investors own, raising the market cost appropriately.

Stock split