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Investing & the Stock Market vocabulary · Dividends & Corporate Actions

Stock split

Meaning in investing & the stock market, with examples

/ˈstɑːk splɪt/nounCommon term

In investing & the stock market, stock split means: A company's decision to divide each existing share into several new shares. The share price falls in the same proportion, so the total value does not change.

In Turkish: hisse bölünmesi, pay bölünmesi

How it is used

Companies announce a split described as a ratio, such as two-for-one or ten-for-one; shares then begin trading on a split-adjusted basis. The aim is often to make each share cheaper for small investors. A reverse split combines shares into fewer, higher-priced ones.

Example sentences

  1. After the ten-for-one stock split, each share traded at around 90 dollars instead of 900.

  2. A stock split does not make shareholders richer; it just cuts the pie into more slices.

Common collocations

  • announce a stock split
  • two-for-one split
  • reverse stock split
  • split-adjusted price
  • bonus issueAn issue of new shares given free to existing shareholders in proportion to their holdings, usually by turning reserves or retained profits into share capital.
  • share priceThe amount of money one share of a company costs on the market at a given moment, set by the orders of buyers and sellers.
  • shareOne of the equal units into which the ownership of a company is divided. If you own shares, you own a part of the company.
  • rights issueA way for a listed company to raise new money by offering existing shareholders the right to buy additional shares, usually at a discount and in proportion to what they already own.

More terms: Dividends & Corporate Actions

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This page explains English vocabulary for learners. It is not financial advice.