Definition

Noun: - A corporate action that increases the number of a company's outstanding shares by issuing more shares to current shareholders, without changing the total market value or shareholders' equity of the company. The action divides existing shares into multiple shares, making the price per share lower while keeping an investor's total stake in the company proportionally the same.

Usage

• Used to describe a specific financial event or corporate decision.
• Often specified with a ratio (e.g., a 2-for-1 split).
• : The board approved a stock split to make the shares more affordable for individual investors.
• : After the stock split, each shareholder received an additional share for every one they owned.

Advanced Usage

• "Forward stock split": The standard type of split that increases the number of shares. This is what is typically meant by "stock split."
• "Reverse stock split": The opposite action, which decreases the number of outstanding shares to increase the price per share. This is a related but distinct concept.

Variants and Related Words

• Split (noun/verb): The common shortened form used in financial contexts (e.g., "The company will split its stock.").
• Share split: A synonymous term, more common in British English.
• Stock dividend: A related but different corporate action where shareholders receive additional shares as a dividend, which may involve accounting changes to equity.

Synonyms

• Share split
• Split (in financial context)

Related Phrases

• "To split the stock": The verbal phrase describing the action.
  • Example: The company decided to split the stock 3-for-1.
• "Post-split": Referring to the period or price after the split has occurred.
  • Example: The post-split price was $50 per share.

Key Concept

• Purpose: A stock split is primarily done to increase liquidity and make shares seem more affordable to small investors, potentially broadening the shareholder base. It does not, by itself, change the fundamental value of an investor's holdings.

Noun

1. an increase in the number of outstanding shares of a corporation without changing the shareholders' equity
   • they announced a two-for-one split of the common stock