Stock Split
Definition
When a company divides its shares into more shares at proportionally lower prices. 2:1 split means each share becomes 2 shares at half price. Your ownership percentage doesn't change, just the number of shares. Reverse splits consolidate shares.
Why It Matters
Splits don't change your ownership or value, just share count. Company might split to lower share price (looks cheaper) or attract retail investors. A reverse split (1:10) usually signals trouble (stock too cheap).
Example
Own 100 shares at $500 per share equals $50,000. Company does 2:1 split. Now you own 200 shares at $250 per share equals $50,000. Nothing changed except share count. Your $50,000 investment still equals $50,000.