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Stock Split Calculator
Calculate your new share count and adjusted cost basis after any stock split or reverse split. See exactly what happens to your position — and confirm that your total investment value stays the same.
Inputs
Forward split: more shares, lower price per share
Your average purchase price per share. Used to calculate new cost basis for tax purposes.
Results
Enter your shares and pick a split ratio
Results update when you click Calculate. Add cost basis to see tax lot adjustments.
How stock splits work
Forward splits: more shares, same value
In a forward stock split, a company increases the number of outstanding shares by issuing more to existing shareholders. A 4-for-1 split turns every 1 share into 4 shares, each worth one-quarter the original price. The company's market cap doesn't change — only the share count and price per share adjust.
Companies typically do forward splits when their stock price gets high enough to deter retail investors. NVIDIA split 10-for-1 at ~$1,200/share in June 2024 to bring the price below $200. Chipotle did a 50-for-1 split to go from ~$3,300 to ~$66.
Reverse splits: fewer shares, higher price
A reverse split consolidates shares. In a 1-for-10 reverse split, 10 shares become 1 share at 10× the price. Companies use reverse splits to meet exchange listing requirements (NASDAQ/NYSE require a minimum share price, typically $1) or to appear more attractive to institutional investors who avoid low-priced stocks.
Reverse splits often signal trouble — they're most common in companies whose stock price has cratered. Watch for the underlying reason: a reverse split doesn't fix the business problems that drove the price down.
Cost basis and taxes
A stock split does not trigger a taxable event. Your total cost basis stays the same — it's simply spread across a different number of shares. If you paid $600/share for 10 shares ($6,000 total) and the stock splits 4-for-1, you now have 40 shares at $150/share cost basis — still $6,000 total.
Most brokerages adjust your cost basis automatically after a split. Always verify: incorrect cost basis means incorrect capital gains when you sell. Keep your own records, especially if you hold shares across multiple accounts.
Does a split make a stock cheaper?
No — and this is the most common misunderstanding. A stock split does not make the stock cheaper in any fundamental sense. A $1,000 stock that splits 10-for-1 to $100 has the exact same market cap, earnings, and valuation multiples. You're not getting a bargain; you're getting smaller slices of the same pie.
That said, splits can affect price indirectly. A lower share price makes the stock accessible to more retail investors and allows easier options trading (options cover 100 shares, so a lower price reduces contract sizes). This increased accessibility can drive short-term demand.
Frequently asked questions
How does a stock split affect my shares?
A stock split increases (forward split) or decreases (reverse split) the number of shares you own, while adjusting the price per share proportionally. In a 4-for-1 forward split, 100 shares become 400 shares at one-quarter the price. Your total investment value remains exactly the same — the split is purely cosmetic from a value perspective.
Do I owe taxes on a stock split?
No. A standard stock split is not a taxable event. The IRS treats it as a reorganization of the same investment. Your total cost basis remains unchanged — it simply gets divided across the new number of shares. You only owe taxes when you eventually sell the shares at a gain. Note: this applies to regular stock splits. Stock dividends or spin-offs may have different tax treatment.
How do I calculate cost basis after a stock split?
Divide your original cost basis per share by the split ratio. Example: you bought at $600/share, and the stock does a 4-for-1 split. New cost basis = $600 ÷ 4 = $150/share. Your total cost basis stays the same ($600 × original shares = $150 × new shares). Most brokerages adjust this automatically, but you should verify your records match.
What is a reverse stock split?
A reverse stock split reduces the number of shares outstanding and increases the price per share. In a 1-for-10 reverse split, 1,000 shares become 100 shares at 10× the price. Companies use reverse splits to raise their share price above exchange listing minimums or to appear more 'institutional'. Unlike forward splits, reverse splits are often seen as a bearish signal because they typically indicate the stock price has fallen significantly.
Does a stock split change the value of my investment?
No — the total value of your investment stays exactly the same immediately after a split. If you owned $10,000 worth of stock before the split, you still own $10,000 after. What changes is the number of shares and the price per share. Think of it like making change: exchanging a $20 bill for two $10 bills doesn't change how much money you have.
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