Definition of 'Stock Split' fwd split break down

fwd split break down 

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Assuming you are talking about a "forward" stock split and not a "reverse/forward" stock split as a previous answerer assumed, a forward stock split is when a company simply divides the number of shares it has into a greater number. The goal is often three-fold (i) increase liquidity, (ii) keep the stock in a certain dollar price range and (iii) send a signal to the markets that the company believes the stock will go up. A few companies do it so that their holders will have a few odd-lot shares to sell off in lieu of a dividend. 

An example: if you own 100 shares and a company does a 2 for 1 forward split, you will receive 100 shares in the split and will end up owning a total 200 shares. If it is 3:2 split, you will get 50 extra shares (owning a total of 150). 

While these splits have a lot of hype, they do not create real value. They are essentially a zero sum game. A cooking example might help. If you own a pie and split it into 10 pieces, you still own a pie. If you split it into 20 pieces (i.e., a 2:1 split of the 10 piece pie), you still own a pie. The pie didn't get bigger. To make the pie bigger, you have to add something else to it. Splitting the pie into more pieces means there are more pieces to go around and it makes it easier for someone to buy a smaller piece of pie or makes it easier for people to share their pie with others. You still have the same pie. 

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