Stock Split
Dividing existing shares into more shares at a proportionally lower price, with no change in total value.
Definition
A stock split increases the number of shares outstanding while proportionally reducing the price per share. In a 2-for-1 split, each shareholder gets twice as many shares at half the price. Total company value, ownership percentages, and the value of each person's holdings remain unchanged. Splits make shares more accessible by lowering the per-share price. Reverse splits do the opposite (fewer shares at higher price).
Why it matters
A stock split does not change the value of your equity, but it does change the numbers on paper. After a 10-for-1 split, you have 10x more shares at 1/10th the price each. This is cosmetic, not economic. Do not confuse a split with actual value creation.
Example
You have 10,000 shares at $50/share ($500K total). After a 5-for-1 split, you have 50,000 shares at $10/share (still $500K total). Your ownership percentage is unchanged. The company did this to lower the per-share price for broader investor access.