Stock Split

In a stock split, a company increases its share count by issuing additional shares to existing shareholders in proportion to their holdings. In a 2-for-1 split, every shareholder receives 2 shares for every 1 they held; the stock price is halved. Total market cap is unchanged. Companies typically split when their stock price becomes very high — making it inaccessible to smaller investors or simply improving trading liquidity.

A reverse stock split works the opposite way — reducing the share count and raising the per-share price. This is often done by struggling companies to avoid being delisted from exchanges that require minimum share prices.

Example: Apple has split its stock five times since going public. In August 2020, Apple executed a 4-for-1 split when shares were trading above $500. After the split, shares opened near $127. There was no fundamental change — same company, same value — but it made shares more accessible to retail investors.

Stock splits are tracked in BMInsider's Portfolio Tracker, which automatically adjusts cost basis and share counts when a split occurs, ensuring accurate performance reporting.