Stock Split

A stock split cuts one expensive share into several. Splitting 1 share into 4 makes the price one-fourth and the share count 4×. It is like cutting a $10 pizza into 4 slices — the total amount (the company's value) stays the same.

When the price gets too high, small investors find even one share burdensome. Lowering the per-share price with a split lets more people buy easily, often livening up trading.

A split itself does not change the company's value. Cutting a pizza into smaller slices does not add to the amount. So thinking "it split, so it is a gain" is a misconception.

But a company doing a split usually means the price had risen a lot and gotten expensive, so it is sometimes read as a sign it had been doing well. Improved accessibility can also draw short-term attention.

Lowering the per-share price with a split eases small investors' access, sometimes raising volume and attention. But this is only a psychological/supply-demand effect; the company's actual value did not grow.

Conversely, a reverse split that merges several shares into one is often a company whose price fell too low trying to keep up appearances, so the context differs.