Split

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Split

Sometimes companies split their outstanding shares into more shares. If a company with 1 million shares executes a two-for-one split, the company would have 2 million shares. An investor with 100 shares before the split would hold 200 shares after the split. The investor's percentage of equity in the company remains the same, and the share price of the stock owned is one-half the price of the stock on the day prior to the split.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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. See also: Last Split, Split Ratio, Split Adjusted.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

split

A proportionate increase in the number of shares of outstanding stock without a corresponding increase in assets or in funds available, as would be the case in a new stock offering or in an acquisition that uses stock as payment. Essentially, a firm splits its stock to reduce the market price and make the shares attractive to a larger pool of investors, although it is questionable if the firm's stockholders actually benefit from a split because share prices are reduced proportionately with the increase in shares outstanding. A 4-for-1 split would result in an owner of 100 shares receiving 300 additional shares, or an after-split total of 4 shares for every 1 share owned before the split. Also called split up, stock split. Compare reverse stock split.
Case Study In April 1996, directors of the Coca-Cola Company approved a 2-for-1 split, the firm's fourth stock split in a decade. The announcement stated that trading in the split shares would begin on May 13, approximately a month after the split was announced. Shares of the firm's common stock fell by $1.25 with the announcement. Shareholders of Coca-Cola could expect that the stock price would decrease by half when the securities commenced trading on a post-split basis. A stock split results in additional shares of ownership without a corresponding change in total income or assets. All per-share financial statistics decline in proportion to the size of the split. Thus, a 2-for-1 split results in twice the outstanding shares, each with half the book value and half the earnings as prior to the split. In general, stock splits create more paper but not more value for shareholders, because the market value of the stock can be expected to fall in proportion to the size of the split. A stock trading at $60 per share just prior to a 4-for-1 split should trade at approximately $15 per share following the split. Academic research investigating how or when investors can profitably invest in stock split situations offers mixed results. Some research indicates that trading stock just prior to a split may create unusual profit opportunities. One well-known study finds that unusual returns can be earned in the days before and after the announcement, but not on the date of the actual split. Other research indicates investors will earn unusually low returns by investing in stock in the year or two following a split. This variability of results means the individual investors cannot expect to earn unusual profits by purchasing a stock just prior to or following a split. By the time a split occurs, any unusual profit opportunity has already passed.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"For my money, the split-level has a dynamic, almost voluptuous, spatial arrangement," says Neal Payton, AIA, of Torti Gallas & Partners in Silver Spring, Md.
The survey administered to the UG's asked questions focusing on their experiences as a mentoree by probing their attitudes about a) the class in general, b) their learning as a result of having mentors in class with them, c) having teachers in the same class with them, d) the mentoring climate that took place in the course thus far, and e) whether or not the student would be inclined to take another split-level course in the future.
In the update, the split-level is now in a gated community, the cars are an SUV and a Beemer, the pool is covered and heated, the fridge a Sub Zero, the stove a Vulcan, the rotisserie a stainless-steel Weber.
At 71 Hillary Lane, a 4-bedroom, 3-bath split-level on .18 acres went for $722,700.
He warned that approval of the extrajudicial killings is 'a symptom of split-level spirituality.'
Some of the plans submitted | with Airbus' split-level cabin patent
It has a hall, lounge, sitting room, dining room with original fireplace, antique solid fuel French stove and built-in dresser, an extended split-level breakfast kitchen with cooker and modern units, plus a modern refitted shower room, while the first floor has a bathroom and three double bedrooms.
WITH views over the River Calder, this spacious split-level apartment is situated on the top floor of an imposing double-fronted house.
At the rear there are split-level gardens which back onto open countryside..
Outside, there is an extensive driveway with a garage and a large parking and turning area, as well as gardens to the front, side and rear which include generous lawns, hedgerows, trees and shrubs, an impressive decking area and a rockery with a feature split-level pond.
The new site will have a split-level design which will increase the range and amount of recyclable material the site can handle.
The split-level apartment is situated in central Yarm overlooking the River Tees.