Question 1

What is a forward stock split?

Accepted Answer

A forward stock split divides existing shares into multiple new shares. For example, in a 2:1 split, each share becomes two shares and the price is halved. The total portfolio value stays the same. Companies do this when their share price becomes too high for retail investors.

Question 2

What is a reverse stock split?

Accepted Answer

A reverse stock split consolidates multiple shares into fewer shares. For example, in a 1:5 reverse split, every 5 shares become 1 share and the price is multiplied by 5. Total value is unchanged. Companies often do this to meet minimum share price listing requirements.

Question 3

Does a stock split change the total value of my investment?

Accepted Answer

No. A stock split does not change the total value of your investment. The price and number of shares change in opposite directions by the same ratio, so the total value (price × shares) remains exactly the same before and after the split.

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