stock split

Stock Split

The dividing of a company's existing stock into multiple shares. In a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.

Notes:

This is usually a good indicator that a company's share price is doing well. However, a stock split doesn't give you any more value, just twice as many shares.

In the U.K., a stock split is referred to as a "scrip issue," "bonus issue," "capitalization issue," or "free issue."

See also: Record Date, Reverse split, Scrip, Split-Off, Split-Up

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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.

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stock split

See split.