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 ?
25 (the "Cash Out Price"), in exchange for each share held immediately prior to the Reverse Stock Split and will no longer be a shareholder of BNS (the "Cashed Out Shareholders").
Despite a volatile market during the first half of 2000, Ruettgers felt that a stock split would create value for existing investors, while also making the stock more attractive to new investors.
After a two-for-one stock split in December, Quaker now trades around $30.
The Company estimates that approximately 2% of its outstanding shares will be redeemed as a result of the Reverse/Forward Stock Split.
July 19 /PRNewswire/ -- Citing the recent final ruling favoring ethanol as a renewable oxygenate by the Environmental Protection Agency, a three-for-two stock split effected as a dividend has been declared by the board of directors of High Plains Corp.
Eastern Standard Time) on December 13, 2006, the effective time of the Reverse Stock Split did not participate in the Forward Stock Split and have the right to receive cash at a price of $2.
The proposal to effect this reverse stock split was detailed in the Company's proxy statement filed with the SEC on March 30, 2006, and was approved by the Company's stockholders on May 5, 2006.
The reverse stock split will be effected by issuing one share of common stock of the Bank for every 1,000 shares outstanding prior to the reverse stock split.
The reverse stock split affects all shares of common stock, stock options, warrants outstanding, and shares issuable upon conversion of the Company's convertible debentures as of immediately prior to the effective time of the reverse stock split.
The reverse stock split, which has received Board of Directors and shareholder approval will go into effect at the commencement of trading on Monday, August 28, 2006.
The reverse stock split was proposed by the Company's Board of Directors in an effort to, among other things, comply with the $1 minimum bid price requirement of, and to remain listed on, the Nasdaq Capital Market.
The reverse stock split marks the achievement of another milestone in Idera's corporate transformation.