Stock Split

A stock split is the act of dividing a company's outstanding commons shares into a larger number of shares.

If a company had a three-for-one-split, for example, and a shareholder held 100 shares before the split, they would own 300 shares after the split. But the value of the company equity owned by the shareholder would remain the same, only the number of units held would differ as the share price changes accordingly. Share splits are subject to the approval of the company's shareholders.