Equity · Core
Stock Split
A stock split increases shares outstanding and cuts the price by the same factor — cosmetics on the claim, not on enterprise value.
Definition
An N-for-1 split multiplies shares by N and divides price by N. Market cap is unchanged on the announcement math. Reverse splits do the opposite, often to keep a listing or optionability.
Why it matters
Splits can change retail access, options strikes, and index mechanics. They do not create earnings. Behavioral demand sometimes bids the name anyway.
Case
Mega-cap splits in 2020–22 made options strikes more granular and pulled in retail flow. EV did not jump because the pizza was cut into more slices.
How to read it
Ignore the price level. Watch whether the split is a liquidity event or a reverse-split distress signal.
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