Stock Split

In a 2-for-1 split, every share becomes two and each is worth half as much. Somebody holding 10 shares at $200 ends up holding 20 shares at $100. The total is unchanged, the ownership stake is unchanged, and nothing about the business has moved.

The usual stated reason is to bring the price of a single share down to a level more people find approachable. That reason has weakened as brokerages have introduced fractional shares, which let a fixed amount of money buy part of a share regardless of its price.

A reverse split runs the other way: shares are combined, so fewer exist and each is worth proportionally more. Companies sometimes do this when a listing requires a minimum share price. Like the ordinary kind, it changes the arithmetic of the shares rather than the business underneath.