stock split


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Related to stock split: stock dividend, reverse 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 ?
Quaker Oats, for example, announced an upcoming stock split and then acquired Snapple Beverage for $1.
The proposed Reverse/Forward Stock Split, Right of First Refusal and Authorized Share Reduction are subject to approval by the holders of a majority of the issued and outstanding shares of Common Stock.
Under the terms of the reverse stock split, each seven shares of issued and outstanding common stock will automatically be combined into and become one share of common stock.
00 per share minimum bid price requirement set forth in Nasdaq Marketplace Rule 4310(c) if a reverse stock split is effected, as well as statements that are preceded by, followed by or include the words "believe," "plans," "intends," "expects, "anticipates," or similar expressions.
Hannah, Chief Executive Officer of Reliance, said, "We are pleased to announce our first two-for-one stock split since our IPO in 1994.
Following the Reverse Stock Split, Asconi anticipates that its shares of Common Stock will continue to be traded on the Pink Sheets Electric Quotation Service under the current symbol "ASCD.
A total of 5,570,106 votes were voted in favor of the reverse stock split proposal, 41,204 votes against the reverse stock split proposal and 28,165 votes abstained.
The company will file a revised preliminary proxy statement for its April 18, 2006 annual meeting containing important information regarding a proposed reverse stock split at a one for thirty-five (1:35) ratio.
A definitive proxy statement containing important information regarding the proposed reverse stock split will be mailed to all stockholders on or about June 21, 2006.
The reverse stock split, which was announced on January 25, 2006, was approved by PTC stockholders at the Annual Meeting of Stockholders on March 10, 2005.
Pink Sheets: CELT), a financial services holding company with headquarters in Salt Lake City, reported that its board of directors unanimously adopted a resolution to seek stockholder approval to amend the company's Certificate of Incorporation to effect a going private transaction involving a 1-for-50,000 reverse stock split of the outstanding shares of the company's common stock, with stockholders holding less than one full share following the reverse stock split receiving Scrip for such fractional share.
Such reverse stock split affects all outstanding shares held as of the close of trading on Tuesday, January 31, 2006, and Alloy's common stock will begin trading as adjusted for the reverse stock split today, Wednesday, February 1, 2006.