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When a company's share price climbs so high that it discourages ordinary investors, boards sometimes take an action that changes nothing about the company's value.

What is a "stock split"?

Dividing existing shares into more shares at a lower price each, without changing total value
A stock split increases the number of shares outstanding while proportionally cutting the price per share, leaving the company's total market value unchanged — it just makes shares look more affordable, and some companies do the reverse, a "reverse split," to boost a low share price and avoid delisting.

A stock split divides each existing share into multiple new shares, cutting the price per share proportionally so the company's total market value stays exactly the same. If a $300 stock does a 3-for-1 split, a shareholder ends up with three $100 shares instead of one $300 share — same total stake, just sliced into smaller, more affordable pieces. Companies do this mainly to make shares look more accessible to everyday investors and to improve trading liquidity.

Selling new shares to raise capital is a completely different action, a secondary offering, which does dilute existing owners and bring in real new cash — a split brings in no cash at all. Merging separate stock classes into one is a governance restructuring, not a price-mechanics move, and doesn't happen through a split.

Some companies go the opposite direction with a reverse split, consolidating many low-priced shares into fewer higher-priced ones specifically to avoid falling below a stock exchange's minimum price requirement and risking delisting.

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