What happens to my shares if a stock splits?
If a stock you own splits, don’t worry! This is nothing to worry about.
Imagine that you have a $100 bill. You want to break it down, so you get change in the form of two $50 bills. You haven’t lost any money, but you now have more bills than you had before—twice as many, to be exact.
If you own a stock that splits, the total value of your shares always remains the same. The only thing that changes is the number of shares on the market. For example, if a company you invest in issues a 2-for-1 split, you’d receive one extra share for each share that you already own. So if you own 1 share of a company worth $100, you’d then own 2 shares worth $50 each, for a total of $100.
Here’s another example. Let’s say you have $200 in stock that cost $400 per share. If that share splits into two shares of $200, you will still have $200 invested in that company’s stock— the only difference being that you would now own a whole share of that stock.
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