Stock Splits Explained: A Deep Dive into What It Means for Investors In the world of stock markets, a "stock split" is a corporate action where a company increases the number of its outstanding shares by issuing more shares to current shareholders, without changing the total value of their holdings. Essentially, it's like cutting a pizza into more slices – the size of the pizza remains the same, but each slice is smaller. The most common type of stock split is a forward stock split, often seen in ratios like 2-for-1, 3-for-1, or 3-for-2. In a 2-for-1 split, for every one share an investor holds, they will receive an additional share. Consequently, the price per share is halved. For instance, if you own 100 shares of a company trading at $100 per share, after a 2-for-1 split, you would own 200 shares, but the price of each share would adjust to $50. Your total investment value remains unchanged at $10,000 (200 shares x $50).