stock split

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Related to stock splits: Reverse Stock Splits

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 ?
com, a Web site tracking stock splits, takes a trader's perspective.
This follows two separate six-for-five stock splits issued the past two quarters by the company.
The common stock split will be effected by issuing one additional share of common stock for each share held by shareholders of record on July 5, 2006.
parent company of State Bank of Long Island, declared a 6 for 5 stock split and a quarterly cash dividend of $0.
84% of all votes cast at the special meeting, and 70% of all shares eligible to be voted, voted in favor of the reverse and forward stock splits.
NEW YORK -- Brookfield Properties Corporation (TSX:BPO)(NYSE:BPO) today announced that March 11, 2005, is the ex-dividend date on the Toronto Stock Exchange (TSX) for the company's previously-announced three-for-two stock split of its outstanding common shares.
The Editor's Portfolio has seen its share of stock splits this year, and Charles Carlson would suspect that there will be more stock splits as the year progresses.
OTCBB: CDLC) has announced that the 1-for-100 reverse stock split and a 100-for-1 forward stock split of its common stock, as set forth in the Articles of Amendment approved by shareholders at the 2004 annual meeting, has become effective as of May 17, 2004 and May 18, 2004 respectively.
A) confirmed today, May 19, 2004, as the ex-dividend date on the Toronto Stock Exchange for its previously announced three-for-two stock split of the company's outstanding common shares, to be implemented by way of a special dividend payable on June 1, 2004.
The effective date of the reverse and forward stock splits will be Friday, May 25, 2001.
A Stock Split Report (which forecasts stock splits before they are announced) is also available.
Other companies announcing stock splits through Tuesday of this week include Philadelphia Suburban Corporation and Nordson Corporation.