1:5 stock split means：What is Stock Split - Uses

A stock split is a corporate action where a company divides its existing shares into multiple new shares, typically at a ratio of 2:1 or 3:1. This is often done to make the stock more affordable and accessible to a broader range of investors, particularly when the share price has become excessively high. While a stock split does not change the companys overall market capitalization, it can increase liquidity and potentially boost interest in the stock.

What is a stock split?

A stock split is when a company increases its number of shares to make trading easier. Although more shares exist, the companys total value stays the same because each shares price is reduced. Common stock splits are 2-for-1 or 3-for-1, meaning shareholders get two or three new shares for each one they owned before.

Another important aspect to remember is that while the stock split reduces the share price, it does not impact its current shareholders. This is because the organisation lowers the fac...