The process of dividing a company’s existing shares into more shares without changing total value is called a stock split.
In a two-for-one split, each old share becomes two new shares and the market price is adjusted to roughly half its previous level. An investor’s ownership percentage does not change merely because of the split, and the company’s total market value is not mechanically increased by the division.
Companies may split shares to make the quoted price more accessible or to broaden participation. A split does not by itself make a company more valuable, improve its profits, or guarantee a future price rise. Stock exchanges and brokers adjust holdings and historical prices to reflect the split.
A reverse stock split works in the opposite direction: multiple existing shares are combined into fewer shares, usually with a higher per-share price. Both types of split change share counts and prices, while the economic value is adjusted correspondingly.