Stock Split

In order to keep a companies share price in the range where investors can purchase a single share for a reasonable amount of money, companies will sometimes split their shares. This is a special dividend that issues one or more shares for each current share of stock. The most common is a 2 for 1 or 3 for 1 split.

Companies will sometimes do a reverse stock split. This generally indicates a company that is in trouble and is trying to make a $0.10 share worth $1 by offering a 1 for 10 split.