What is a stock split?

A stock split divides existing shares into multiple new shares. In a 4:1 split, each share becomes 4 shares at 1/4 the price. Your total investment value stays the same — you just own more shares at a lower price per share.

What is a reverse stock split?

A reverse stock split consolidates multiple shares into fewer shares. In a 1:10 reverse split, every 10 shares become 1 share at 10x the price. Companies use reverse splits to meet exchange listing requirements or improve perceived stock price.

Does a stock split change the value of my investment?

No. A stock split does not change your total investment value. If you own 100 shares at $800 ($80,000 total), after a 4:1 split you own 400 shares at $200 ($80,000 total). Only the number of shares and price per share change.

What happens to fractional shares in a reverse split?

In a reverse split, if you end up with fractional shares, most brokers cash them out at the current market price. For example, if you have 105 shares in a 1:10 reverse split, you get 10 whole shares plus cash for 0.5 shares.

How does a stock split affect my cost basis?

Your total cost basis stays the same, but the cost basis per share is adjusted. In a 4:1 split, your cost basis per share is divided by 4. This is important for calculating capital gains when you eventually sell.

Stock Split Calculator

Calculate forward splits, reverse splits, and cumulative split history. Your total value never changes — only shares and price adjust.

Currency

All amounts displayed in selected currency

Shares owned

Number of shares you currently own

Pre-split price per share

Current price before the split

Split ratio

How many new shares per old share

—

Estimates only. Stock splits do not change total value. Consult a financial adviser for personalised guidance.

Try another scenario

Found an issue? Send feedback

How to Use This Calculator

Forward Split tab

Enter your current shares and pre-split price, then select the split ratio (2:1, 3:1, 4:1, etc. or custom). The calculator shows your new share count, new price per share, and confirms your total value is unchanged.

Reverse Split tab

Enter your shares and current price, then pick the reverse ratio (1:2, 1:5, 1:10, etc.). See how many whole shares you end up with, any fractional shares that would be cashed out, and the new price per share.

Split History tab

Enter your original shares and add each split your stock went through. The calculator multiplies them sequentially to show your final share count. Great for tracking stocks like AAPL, TSLA, or NVDA through multiple historical splits.

The Formulas

Forward Split
New Shares = Old Shares × Split Ratio
New Price = Old Price ÷ Split Ratio

Reverse Split
New Shares = Old Shares ÷ Reverse Ratio
New Price = Old Price × Reverse Ratio

Both cases
Total Value = unchanged (Old Shares × Old Price = New Shares × New Price)
New Cost Basis = Old Cost Basis ÷ Split Ratio

Stock splits are purely arithmetic. They change the number of shares outstanding and the price per share, but the market capitalization and your investment value remain identical.

Examples

Example 1: Forward Split (4:1)

You own 100 shares of a company trading at $800 per share.

Before split100 shares × $800 = $80,000

After 4:1 split400 shares × $200 = $80,000

New cost basis$200 per share

Example 2: Reverse Split (1:10)

You own 1,000 shares of a penny stock at $2 per share.

Before split1,000 shares × $2 = $2,000

After 1:10 reverse100 shares × $20 = $2,000

Fractional sharesCashed out at market price

Reverse splits are common when a stock falls below the exchange's minimum price requirement (typically $1 for NASDAQ/NYSE).

Example 3: AAPL Through 3 Historical Splits

If you bought 10 shares of Apple and held through three major splits:

Start10 shares

After 2:1 split20 shares

After 7:1 split140 shares

After 4:1 split560 shares

Your original 10 shares became 560 shares through a cumulative 56x multiplier (2 × 7 × 4 = 56).

FAQ

Why do companies do forward stock splits?▼

Companies split their stock to make shares more affordable and accessible to retail investors. A $800 stock becomes $200 after a 4:1 split. While fractional shares are now available at most brokers, a lower nominal price can increase trading volume and perceived accessibility.

Why do companies do reverse stock splits?▼

Companies use reverse splits primarily to meet exchange minimum price requirements. NASDAQ and NYSE typically require stocks to trade above $1. A reverse split also reduces the number of outstanding shares, which can make per-share metrics look stronger. However, a reverse split is often seen as a bearish signal.

Do I need to do anything when my stock splits?▼

No action is needed. Your broker automatically adjusts your share count and cost basis. The split happens overnight, and you will see the new share count and price in your account the next trading day. There is no tax event triggered by a stock split.

How does a stock split affect options contracts?▼

Options are adjusted proportionally. In a 4:1 split, each contract still represents 100 shares, but the strike price is divided by 4 and the number of contracts is multiplied by 4. The total value of your options position remains unchanged. Non-standard splits may create adjusted (non-standard) contracts.

Is a stock split a taxable event?▼

A standard forward stock split is not a taxable event. Your cost basis is simply divided among the new shares. However, in a reverse split, if you receive cash in lieu of fractional shares, that cash payment may be taxable as a capital gain. Consult a tax professional for your specific situation.

Related Calculators

Add This Calculator to Your Website

Embed the sum.money Stock Split calculator. Free, responsive, always up-to-date.