| There are two types of stock splits - forward splits and reverse splits. Forward
splits increase the number of shares outstanding. For instance, in a Forward Split, if a
stock splits 2-for-1, and you hold 1 share before the split, after the split you hold 2
shares worth one half the price per share. Reverse splits reduce the number of shares
outstanding. In a Reverse Split just the opposite happens. If you hold 2 shares before the
split, and the stock splits 1-for-2, after the split you hold 1 share worth twice the
price per share. |
