What is a stock split? The company increases the number of shares and reduces the price by the same factor. A 2-for-1 split turns one £200 share into two £100 shares. Your percentage ownership stays the same. Splits are optics and accessibility, not magic profits.
Why companies split
A lower per-share price can make the stock feel more reachable for smaller orders and can attract attention. It does not change the factory, the brand or the earnings.
What you see in the account
Share count rises; price per share falls; market value of the position is designed to be unchanged at the moment of the split, aside from normal market moves.
Reverse splits
A reverse split reduces share count and raises the price. Sometimes used by struggling companies to stay in listing ranges. That is a different signal than a healthy firm splitting a high-priced stock.
What not to do
Do not buy only because a split was announced. Do not sell in confusion thinking you were diluted. Read the company’s notice and your platform’s position update.
Keep splits in perspective
Corporate actions are housekeeping. Your strategy is still allocation across stocks, and if you use them, crypto and metals. A split does not replace research.
