Markets · 6 pages · 12 min

How a stock split changes the count not the pie

A stock split multiplies the shares and divides the price, leaving the company the same size.

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From the opening

A stock split increases the number of shares and reduces the price per share in the same proportion, so each owner's fraction of the company stays put. The company's assets, earnings, and overall market value are the pie, and the split only cuts that pie into more slices. The opening covers share count rises, price is divided to match, and the owner's fraction stays.

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Inside

Share count rises
Price is divided to match
The owner's fraction stays
No cash has to leave
Where the idea stops applying
A distinction worth keeping

Sources

Forward stock split
Split-adjusted share price

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How a stock split changes the count not the pie

From the opening

Inside

Sources

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