stock split

Definition

An increase in the number of outstanding shares of a company's stock, such that proportionate equity of each shareholder remains the same. This requires approval from the board of directors and shareholders. A corporation whose stock is performing well may choose to split its shares, distributing additional shares to existing shareholders. The most common stock split is two-for-one, in which each share becomes two shares. The price per share immediately adjusts to reflect the stock split, since buyers and sellers of the stock all know about the stock split (in this example, the share price would be cut in half).
Some companies decide to split their stock if the price of the stock rises significantly and is perceived to be too expensive for small investors to afford. also called split.

Use stock split in a sentence

After my company's stock price doubled overnight, our board of directors decided to bring the price of each individual share down by performing a stock split and granting each holder of a share two shares at half price.

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You may have to undergo a stock split and will need to come up with a plan on how to proceed.

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Even though the young woman only bought 20 shares of stock, after the stock split, she had 40 shares to continue earning.

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