What is a stock split and does it hurt investors?
A company may declare a stock split to attract more investors by making the share price lower. In a stock split, a company having 1 million shares outstanding at $10 a share will then have 2 million shares outstanding at $5 a share. Reverse stock splits are also possible, reducing the number of shares outstanding by increasing individual share value. Stock splits and reverse stock splits have no negative effects on investors.
