![]() ![]() Increasing the number of shares outstanding makes a stock easier for people to buy and sell due to the lower price. Therefore, each share will trade at a lower price once the split is completed. What is a stock split?Ī forward stock split occurs when a company decides to divide its stock, effectively increasing the number of outstanding shares.Īfter the split, a single share will represent a smaller portion of the overall company than it did earlier. There are two types of stock splits: a normal (or forward) split and a reverse split. ![]() Here’s what you need to know about stock splits and how they are viewed by the market. Stock splits have been on the rise recently, with Amazon ( NASDAQ: AMZN), Alphabet ( NASDAQ: GOOGL), Tesla ( NASDAQ: TSLA), and GameStop ( NYSE: GME) among some of the well-known companies to announce they will be splitting their shares.Ī split is a tool that companies, often with high stock prices, use to increase (or reduce) the number of existing shares and reduce (or increase) the face value of each share.
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