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What happens in a stock split and why is this a positive move?
Wiki User
∙ 12y ago
Assume you have 100 shares worth $100 per share.
If the stock splits 2 for 1, you will have 200 shares worth $50 per share.
In both cases, you have $10,000, so the split itself has no value.
The hope is that at $50 per share more people will be able to afford to buy than at $100 per share. More buyers may mean that the future price will be higher. This is a wish, not a guarantee. Never buy just due to a split. Always consider if the stock is attractive after the split as if it never split.
Wiki User
∙ 12y ago
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