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 ?
While some academics call a stock split a non-event, Roger Perry, CEO of Rightline.
05 per share, after giving effect to the two-for-one stock split.
The reverse and forward stock splits will occur automatically on the effective dates, and the Company's stock record books will reflect these transactions at that time.
During this period, a buyer of Brookfield common shares will be assigned an instrument known as a due bill, which is the right to participate in the stock split.
Those stockholders who held a fractional share of common stock as a result of the reverse stock split are entitled to a cash payment in lieu of being issued that fractional share in the amount equal to $38.
Shareholders wishing to trade on the NYSE between May 19, 2004 (the normal ex-dividend date which usually occurs two days prior to the record date) and June 1, 2004 (the distribution date), will be trading shares at the full value of the stock split.
The result of the forward stock split for stockholders with 50 or more pre-reverse/forward split shares will be that they will hold one-half the number of shares of the company's common stock after the splits.
You may get details on all of the above stock splits and others by visiting InvestmentHouse.
Career Education Corporation (Nasdaq:CECO) announced August 1 that its board approved a 2-1 stock split to begin trading on a split-adjusted basis on August 28, 2000.
16 a 2-1 stock split to be payable on or about September 19, 2000.
Hewlett-Packard Company (NYSE:HWP) also announced yesterday that its board approved a 2-1 stock split to be effective on Oct.
Nasdaq:ERTS) announced yesterday that its board approved a 2-1 stock split to be distributed on Sept.