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The Short Answer

What is a Stock Split?

Companies like to play with the price of their stocks. Here’s why and what you should know.

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Recently, both Apple (AAPL) and Tesla (TSLA) announced stock splits. Apple announced a 4-for-1 split, while Tesla announced a 5-for-1 split. What does that mean?

Just Math
Simply put, a stock split is exactly what it sounds like. One share gets divided, or split, into multiple shares. Don’t worry, though. The value of your holdings is the same, just in smaller chunks.

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Ruth Saldanha does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.