When a company splits its stock, it increases the number of shares that existing investors own, which reduces its stock price by a proportionate amount. It just slices the same pie into smaller pieces. Nevertheless, investors often welcome the news of a stock split. It generally draws positive attention to the stock, and the lower share price can potentially attract new investors. You can find stocks that will split using a stock splits calendar, which lists upcoming splits and their relevant details.
Click the text box at the top of the page that allows you to search within the website. This ratio might be 2-for-1, 3-for-2 or any other combination. The first number represents the multiple of shares you will own after the split for every multiple of shares you own equal to the second number before the split.
For example, in a 2-for-1 split, you will own two shares after the split for every one share you own before the split. If you buy 1, shares before the split, you will own 2, after the split. This is the date the company issued a formal announcement about the upcoming split. A company distributes the additional shares for the split on this date.
In this example, if the payable date is June 1, the company would complete the split on that date. This date occurs on the first trading day after the payable date. Concluding the example, assume the ex date is June 2. Because twice as many shares are outstanding as were outstanding before, the stock price would halve. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors.
This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above.
Skip to main content. What Is a 1: Step 2 Click the text box at the top of the page that allows you to search within the website. Tip A reverse stock split occurs when a company reduces the shares investors own. In a reverse split, the first number in the split ratio is smaller than the second.
For example, in a 1-for-3 reverse split, you would own one share after the split for every three shares you owned before the split. References 3 Financial Industry Regulatory Authority: Processing Securities Transactions; David M. Resources 3 Yahoo Finance: Stock Splits Calendar Nasdaq: Zacks Research is Reported On:More...