Stock Split Calculator

What Is a Stock Split?

A stock split is a corporate action where a company divides its existing shares into multiple new shares to increase liquidity and make the share price more accessible to investors. While the total number of outstanding shares increases, the company's market capitalization remains unchanged — the share price adjusts proportionally downward.

Use our free Stock Split Calculator to instantly determine your new share count, adjusted cost basis, and post-split share price for any split ratio — forward or reverse.

How a Stock Split Works

In a stock split, a company announces a split ratio (e.g., 2-for-1, 3-for-1, 3-for-2). On the effective date, each existing share is replaced by the specified number of new shares, and the share price is divided by the same ratio. Your total investment value stays exactly the same.

Example: 2-for-1 Forward Split

Suppose you own 100 shares of a company trading at $200 per share, and the company announces a 2-for-1 stock split:

• Before split: 100 shares × $200 = $20,000 total value
• After split: 200 shares × $100 = $20,000 total value
• Result: Your share count doubles, price halves, total value stays identical

Stock Split Formula

For a 3-for-2 split: New Shares = Original × 3/2 = 1.5× original. New Price = Old Price ÷ 1.5.

Common Stock Split Ratios

Forward Split vs. Reverse Split

Stock splits come in two forms, each serving a different purpose:

Forward Stock Split

• Increases the number of shares outstanding
• Lowers the share price proportionally
• Makes shares more affordable for retail investors
• Signals company confidence and strong performance
• Common ratios: 2-for-1, 3-for-1, 4-for-1, 3-for-2

Reverse Stock Split

• Reduces the number of shares outstanding
• Raises the share price proportionally
• Often used to meet exchange minimum price requirements (e.g., NASDAQ requires $1 minimum)
• Can signal financial distress, though not always
• Common ratios: 1-for-2, 1-for-5, 1-for-10, 1-for-20

What Happens to Your Cost Basis?

Your cost basis per share adjusts automatically with the split. For a 2-for-1 split, if you originally bought 50 shares at $100 each ($5,000 total cost basis), after the split you own 100 shares with a cost basis of $50 each. The total cost basis remains $5,000. When calculating capital gains for future tax purposes, use the adjusted per-share cost basis. Our companion Capital Gains Calculator can help you estimate taxes when you eventually sell.

Why Companies Split Their Stock

1. Improve liquidity: Lower share prices attract more buyers, increasing trading volume and reducing bid-ask spreads.
2. Make shares accessible: At $3,000+ per share, many retail investors cannot afford even one share. Splits make ownership possible for a wider audience.
3. Signal confidence: Companies typically split stock when their share price has appreciated significantly — signaling management's confidence in continued growth.
4. Index inclusion: Some indices weight by share price; a lower price can improve eligibility and representation.
5. Employee compensation: Lower share prices make stock options and employee stock purchase plans (ESPPs) more practical.

What a Stock Split Does Not Change

• Market capitalization: Total company value remains unchanged — shares × price per share = same total.
• Your ownership percentage: Your proportional stake in the company stays exactly the same.
• Fundamentals: Revenue, earnings, dividends (adjusted per share), and growth prospects are unaffected.
• Voting power: Total voting rights remain proportional; you control the same percentage of votes.

Read our complete guide on Stock Splits Explained: What They Are, How They Work, and How to Calculate New Shares for a deeper dive into forward and reverse splits, cost basis adjustments, and famous split case studies.