Understand the What and Why of Stock Splits

Skip to main content. What impact does a Intel stock split have on its investors? Charles Kaplan, president of the investment consulting firm Equity Analytics, told Bankrate. Check this box if you wish to have a copy mailed to you. None of these reasons or potential effects agree with financial theory, however. The number of new shares you get is in direct proportion to how many you owned before, but the number itself will be smaller.

Stock splits are back. Netflix is the latest Standard & Poor’s company to announce that it’s splitting its shares. Owners of shares of .

The answer may depend on how long you hold the shares

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Why Do Stocks Split?

The most common stock splits are, 2-for-1, 3-for-2 and 3-for An easy way to determine the new stock price is to divide the previous stock price by the split ratio. In the case of our example, divide $40 by 2 and we get the new trading price of $ If a stock were to split 3-for-2, we'd do the same thing: 40/(3/2) = 40/ = $ And with such an escalation in reverse stock splits, I thought it might be time to review the good and the bad aspects of reverse stock splits in case you own shares in a company that just executed or are contemplating executing a reverse split. Stock splits may seem like a gift to some investors, but there is little evidence that you benefit in any meaningful way when a company splits its stock. Here’s what happens. Amalgamated Kumquats, which is currently priced at $80 per share, announces a 2-for-1 stock .