Stock Split

A stock split is a corporate action in which a company divides its existing shares into multiple new shares to increase the number of shares outstanding. This action is typically taken to lower the trading price of the stock, making it more accessible to a broader range of investors. For example, in a 2-for-1 stock split, each shareholder will receive an additional share for each share they already own, effectively doubling the number of shares while halving the stock price. Despite the increase in the number of shares, the overall market capitalisation of the company remains unchanged, as the total value of the shares owned by shareholders does not change. Stock splits are often undertaken by companies whose stock price has risen significantly and is considered too high for average investors, aiming to enhance liquidity and attract more investment.