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A corporate action that increases the number of outstanding shares by dividing each share into multiple shares, proportionally reducing the price per share while maintaining total market capitalization.
In a 2-for-1 stock split, a shareholder with 100 shares at $200 each would afterward hold 200 shares at $100 each. The total value ($20,000) remains unchanged. Companies split their stock primarily to make shares more accessible to retail investors and to increase liquidity. Apple has split its stock five times since going public. A reverse stock split consolidates shares (e.g., 1-for-10), raising the per-share price. Companies sometimes do reverse splits to meet minimum exchange listing requirements. While stock splits are economically neutral, they often generate positive market attention.