What is a Stock Split?
A stock split is a corporate action where a company divides its existing shares into multiple new shares. While the number of shares increases, the total value of your investment remains the same immediately after the split. Stock splits make shares more affordable and increase liquidity.
Types of Stock Splits
Forward Stock Split
In a forward split, shares are divided into more shares at a proportionally lower price. For example, in a 2-for-1 split, each share becomes two shares, and the price is halved. Your total investment value stays the same.
Reverse Stock Split
A reverse split consolidates shares into fewer shares at a higher price. In a 1-for-10 reverse split, every 10 shares become 1 share at 10 times the price. Companies often do this to meet exchange listing requirements.
How to Use This Calculator
- Enter the number of shares you currently own
- Enter the current stock price per share
- Select whether it's a forward or reverse split
- Choose the split ratio (or enter a custom ratio)
- Click "Calculate" to see your new position
Common Split Ratios
- 2-for-1: Most common forward split; doubles shares, halves price
- 3-for-1: Triples shares, price becomes one-third
- 4-for-1: Common for high-priced tech stocks
- 1-for-10: Common reverse split ratio
Important Notes
- Stock splits do not change the total value of your investment
- Your cost basis per share is adjusted proportionally
- Stock splits can signal company confidence in growth
- Reverse splits may indicate a company trying to avoid delisting
