Stock Split
A corporate action in which a company increases its total number of outstanding shares by dividing existing shares into multiple new shares, proportionally reducing the share price.
Full Definition
In a stock split, a company issues additional shares to existing shareholders in a fixed ratio (e.g., 2-for-1 or 3-for-2), resulting in more shares outstanding at a proportionally lower price per share, while the total market capitalisation remains unchanged. The transfer agent is responsible for processing the additional share issuance, updating shareholder records, and coordinating with DTC for book-entry adjustments. A reverse stock split reduces the number of shares and increases the share price proportionally. Editors should note the correct hyphenation: 'stock split' (noun, no hyphen) but 'stock-split ratio' (compound modifier). The ratio is always styled in 'X-for-Y' format, hyphenated.
Usage
Usage note: No hyphen in the noun form 'stock split'. Hyphenate the ratio: '2-for-1'. 'Reverse stock split' must always include 'reverse' to distinguish it from a forward split—never abbreviate as merely 'reverse split' in formal documents without prior definition.
In Context
- "Following the 4-for-1 stock split effective June 1, 2024, the par value per share was reduced from $0.01 to $0.0025." — 8-K filing / shareholder notice
- "The Transfer Agent will automatically adjust registered holders' share counts to reflect the 3-for-2 stock split; no shareholder action is required." — Corporate action notice