Please explain 2:1 and 1:2 stock split when I have 100 shares?
Answer:
If the split is 2:1 you would end up with 200 shares, if 1:2 you would end up with 50. One way decreases the value of each share, the other increases the value.
WJVV is correct about the number of shares in question, but not the value. In theory, whether the stock splits 2:1 or reverse splits 1:2, the value of the company has not changed. Only the perception. Regular stock splits are viewed positively by the market, and vice versa for reverse splits. If you have 100 shares at $1 per share, your investment is worth $100. In a 2:1 split, you have 200 shares @ .50. In a 1:2 split, you have 50 shares @ $2. Both situations are still worth $100.
100 shares 2:1 50 shares ----- 100 shares 1:2 200 shares
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