How do stock splits work?
Answers | 1
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.