Size
Stock Split
A stock split increases the number of shares and cuts the price per share so the company's value stays the same.
A 4-for-1 split gives you four shares for each one you held and divides the price by four. Your stake, the market cap, and the company's earnings do not change because of the arithmetic. Companies split so the share price looks approachable, and sometimes because a high price has started to discourage small orders. The business is the same the next morning.
A reverse split does the opposite and is often a bid to stay listed when the price has collapsed. Treat a reverse split as a flag to reread the business, not as a cosmetic event. Forward splits sometimes coincide with momentum because management splits stocks that have already risen. The rise happened before the split. Do not pay up just because the price looks 'cheaper' in dollars per share.
Formula
In an N-for-1 split, share count × N and price ÷ N; market cap is unchanged.
Live example
Apple Inc. (AAPL) last printed at $345.33 with a market cap of $5.04T. Market cap is the equity value you see above. Enterprise value would add net debt, which this quote row does not itemize.
Related
Shares Outstanding · Market Cap · Earnings Per Share (EPS)
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Questions
Do I need to do anything when my stock splits?
At a normal broker, the new shares appear on their own. Your cost basis is spread across the new count.
Does a split change EPS?
EPS is divided by the same factor as the price, so the P/E is unchanged. Historical charts are adjusted so the line does not show a fake crash.