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Originally Published: Aug 26, 2020
Originally Published: Aug 26, 2020 Last Updated: Jan 10, 2024 6 min read

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Stock splits — when a company boosts its number of shares, lowering the per-share price of its stock — have gotten rarer in recent years. But since Apple and Tesla announced they both plan splits later this month, experts say more companies may follow.

“In the last two to five years, it’s been kind of a status symbol to have a high stock price but now that’s unwinding,” says stocks splits expert Neil Macneale, author of the 24-year-old 2 for 1 stock split newsletter. “We might be starting a new trend.”

Stock splits are essentially an accounting move, albeit one that can make a stock more appealing to investors, at least according to proponents. During a split a company typically divides its share count in two, or three or four, leaving each investor with more shares.

So if you own one share of a stock that trades at $100, after a 2-for1 stock split you would two shares that trade at $50 each. The exercise does not affect a company’s business prospects or, in theory, its overall market value.