stock split

(redirected from reverse split)
Also found in: Dictionary, Thesaurus, Acronyms, Wikipedia.
Related to reverse split: stock split

Stock split

Occurs when a firm issues new shares of stock and in turn lowers the current market price of its stock to a level that is proportionate to pre-split prices. For example, if IBM trades at $100 before a two-for-one split, after the split it will trade at $50, and holders of the stock will have twice as many shares as they had before the split. See: Split.

Stock Split

The act of a publicly-traded company increasing the number of outstanding shares while maintaining the same market capitalization. In other words, a company engages in a stock split in order to decrease its share price by increasing the number of shares available. Current holders of the stock are given more shares so that they maintain the same percentage of ownership in the company. For example, a company with a share price of $400 may double the number of shares so that the share price drops to $200. Companies conduct stock splits for a number of reasons; one possible reason is to keep its shares affordable for investors. See also: Last Split, Split Ratio, Split Adjusted.

stock split

See split.

Stock split.

When a company wants to make its shares more attractive and affordable to a greater number of investors, it may authorize a stock split to create more shares selling at a lower price.

A 2-for-1 stock split, for example, doubles the number of outstanding shares and halves the price. If you own 100 shares of a stock selling at $50 a share, for a total value of $5,000, and the company's directors authorize a 2-for-1 split, you would own 200 shares priced at $25, with the same total value of $5,000.

Announcements of stock splits, or anticipated stock splits, often generate a great deal of interest. Buyers may simply want to take advantage of the lower share price, or they may believe that the split stock will increase in value, moving back toward its presplit price.

While 2-for-1 splits are the most common, stocks can be also be split 3-for-1, 10-for-1, or any other combination. In addition, a company can reverse the process and consolidate shares to reduce their number by authorizing a reverse stock split.

stock split

see SHARE SPLIT.

stock split

or

share split

an increase in the number of SHARES in a JOINT-STOCK COMPANY that does not affect the capitalization of the company. For example, Company X has 10,000 authorized, issued and fully paid-up shares, each with a par value of £1, and total SHAREHOLDERS’ CAPITAL is shown in the BALANCE SHEET at £10,000. The STOCK EXCHANGE values the company at £100,000, making each share worth £10. The company wishes to attract a wider shareholder base by reducing the market PRICE of each share, so it undertakes a two-to-one stock split, giving existing shareholders two new 50p shares for each share held. The company now has 20,000 authorized, issued and fully paid-up shares of 50p nominal value, and capitalization of the company remains unchanged at £10,000. However, now the stock-market price of the shares will be £5, which it is hoped will improve the marketability of the shares. See also SHARE CAPITAL.

Stock Split

Additional shares of stock distributed to shareholders at no cost. The number of shares received are a ratio of the shares owned. The basis of the original shares is generally apportioned equally to the total shares owned after the split.
References in periodicals archive ?
A summary of the five ETFs undergoing reverse splits is as follows (please note the CUSIP changes, effective November 18, 2015):
As previously reported by Alvarion, the reverse split is intended to increase the per share trading price of the Company's ordinary shares to satisfy the $1.
Minatura may, at its sole discretion, abandon the proposed Reverse Split for any reason at any time before it is effectuated, which will be a date specified in the notice to shareholders.
Following the reverse splits, UWTI and UGAZ will have new CUSIPs but will retain their same ticker symbols.
Shareholders at the time of the reverse split who otherwise would be entitled to fractional shares will be issued checks in lieu of fractional shares.
Shareholders holding shares in brokerage accounts will not be required to take any action once the Reverse Split becomes effective, as the number of their shares of the Company's stock will be automatically adjusted to reflect the number of shares as adjusted by the Reverse Split.
The reverse split and conversion of the convertible notes to common stock completes a series of steps we have recently taken, including a $5 million private placement, solidifying and extending our distribution agreement with Samsung Electronics through 2010, significantly reducing operating expenses, and restructuring our bank debt," said GVI Chief Executive Officer Steven Walin.
Nasdaq began reflecting the reverse split in the quotation of the price of the Company's common stock in the public market beginning on or about March 19 and assigned the Company's new trading symbol of PHCP.
We refer to the reverse split and the related payments to shareholders holding fewer than 2,000 pre-split shares as the "Reverse Split.
The reverse split would be effected by an amendment of Comprehensive Care Corp.
In the end it is management's duty to bring value to our shareholders and we believe the reverse split will bring new found interest in our stock.
HOUSTON, March 2 /PRNewswire/ -- Zapata Corporation's (NYSE: ZOS) board of directors has recommended stockholders approve a one-for-five reverse split of the company's common stock.