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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

stock split

See split.
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.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

stock split

see SHARE SPLIT.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
The final sample contained 527 stock split announcements by 481 firms.
Concurrently, the reverse stock split reduced the company's issued and outstanding shares of common stock from approximately 70 million to approximately seven million.
While the number of the fund's outstanding shares of common stock will decline, neither the fund's portfolio holdings nor the total value of stockholders' investments in the fund will be affected as a result of the reverse stock split.
The reverse stock split affects all issued and outstanding shares of the Company's common stock, as well as the number of shares of common stock available for issuance under the Company's equity incentive plans.
"The stock split or reverse split happens after you've done the research and made your purchase."
Al khaliji, Dlala Holding and Qatar Oman Investment will implement stock split on June 10; QIIB and Alijarah Holding (June 11); QNB, Ahlibank Qatar and Islamic Holding (June 12); Qatar Islamic Bank and Doha Bank (June 13) and Masraf Al Rayan (June 16).
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