In a split, the number of a company’s shares is increased by a certain ratio. This action makes the shares “cheaper” (while having no impact from an accounting point of view) and thus more attractive for new purchasers. Particularly in the USA, splits are very popular because companies do not wish to “price themselves out of the market” for smaller investors. As an example, a 2:1 split means that a stock which previously cost 50 CHF is converted into two shares, each of which then costs only 25 CHF. Following such a split, the shareholder owns twice as many shares, each of which has half its former value.

See alsoShareCapital Events