Asked by Martha  |  Submitted February 24, 2014

How do stock splits work?

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  Answers  |  1

February 25, 2014

Say for instance you own 100 shares of a stock valued at $10 each for a total investment of $1,000. If a 2:1 stock split, now you own 200 shares (2 for every 1) but now the stock price is cut in 1/2 (by 2) to $5 each share. 200 shares x $5/share still equals the $1,000 investment. After stock splits, you should end up owning the same investment as only the # of shares and price per share is adjusted.

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