A stock split is a corporate action in which a company divides each existing share into multiple new shares.
In a two-for-one split, an investor holding one share receives two shares, while the market price per share is adjusted to roughly half its previous level. The investor’s total value is theoretically unchanged immediately after the split, ignoring market movements and transaction effects.
Companies may use splits to reduce the trading price of individual shares and make them appear more accessible to investors. A split does not by itself change the company’s total market capitalization or the shareholder’s proportional ownership.
A reverse stock split works in the opposite direction: multiple existing shares are combined into fewer shares. Stock splits can create attention and may coincide with price changes caused by investor sentiment, but the mechanical split itself does not create economic value.