Stock Split

A stock split is a corporate action in which a company divides its existing shares into multiple new shares to increase the total number of shares outstanding. This process is typically done to make shares more affordable and enhance liquidity in the stock market, as a lower share price can attract more investors. For example, in a 2-for-1 stock split, each shareholder will receive an additional share for every share they own, effectively doubling the number of shares while halving the share price. Importantly, the overall market capitalization of the company remains unchanged as the total value of shares held by investors does not change—investors simply own more shares at a lower price per share. Stock splits do not directly impact a company's fundamental value or financial health, but they can influence market perception and trading volume.