{"id":45294,"date":"2023-06-23T09:06:00","date_gmt":"2023-06-23T07:06:00","guid":{"rendered":"https:\/\/staging.captrader.com\/glossar\/aktiensplit\/"},"modified":"2024-03-24T15:07:12","modified_gmt":"2024-03-24T14:07:12","slug":"stock-split","status":"publish","type":"glossar","link":"https:\/\/www.captrader.com\/en\/glossar\/aktiensplit\/","title":{"rendered":"Stock split"},"content":{"rendered":"

In a stock split, a company's securities are divided into several shares. Although the total value remains the same, a stock split has more advantages than disadvantages. Here you can find out why a company decides to split its shares and what you should bear in mind as an investor.\u00a0<\/p>\n\n\n\n

What is a stock split?\u00a0<\/h3>\n\n\n\n

A stock split is the division of securities: One share becomes 2, 5, 10 ... depending on the number the company deems appropriate. With the share split, the value of a share is also distributed over the new number.\u00a0<\/p>\n\n\n\n

If a security is split by a factor of 1 to 3, three new shares are created from each share. These each have a third of the original value. For investors, a share split therefore initially changes nothing: their investment in a company retains its value, but is now spread over a larger number of shares.\u00a0<\/p>\n\n\n\n

\"Illustration<\/figure>\n\n\n\n

A \"reverse stock split\" or reverse split is also possible: here, several shares are combined to create a smaller number of securities. These then have a higher value, which corresponds to the sum of the previous shares.\u00a0<\/p>\n\n\n\n

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A share split is always carried out on a fixed record date. From this date, all shares are traded with the new number and the new value per security. As an investor, you do not need to take any specific steps, as the change is automatically recorded in your securities account.\u00a0<\/p>\n\n\n\n

Reasons for a share split<\/h3>\n\n\n\n

Securities traded on the stock exchanges experience fluctuating prices. Ideally, however, the price of a share goes up in the long term and the investor's investment increases in value. After a few years (or sometimes even after just a few weeks), the price of a share has often increased considerably.\u00a0<\/p>\n\n\n\n

Share prices that are too high are much less attractive, especially for private investors. They have to invest a large amount to acquire a security at all. Such a hurdle discourages people with little capital from buying and thus reduces the popularity and trading volume of the share (see also: Alternative Fractional Shares<\/a> at CapTrader).\u00a0<\/p>\n\n\n\n

The main purpose of a stock split is therefore to make a security more attractive: Cheaper shares can also be bought with low capital requirements. Investors can also easily buy additional shares at regular intervals without having to invest large sums each time.\u00a0<\/p>\n\n\n\n

In practice, a share split therefore often leads to an increase in trading volume: the new, lower price per share entices more investors to buy. This usually results in rising share prices. A share split is therefore carried out by a company primarily to increase the attractiveness of its own shares and to stimulate trading.\u00a0<\/p>\n\n\n\n

Reasons for a reverse stock split (reverse split)<\/h3>\n\n\n\n

Not all companies experience long-term upturns on the stock markets. There are numerous reasons that lead to falling share prices. However, particularly cheap shares can indicate a low value of the respective company or economic problems.\u00a0<\/p>\n\n\n\n

Low prices therefore set off warning bells for many investors. The result is often reduced demand and lower trading volumes, which in turn can further reduce the value of a share. Companies often try to counteract this development with a reverse stock split.\u00a0<\/p>\n\n\n\n

Merging several shares reduces the number of securities, but increases their price. For example, if two shares are turned into one as part of a reverse stock split, this share then has twice the value.\u00a0<\/p>\n\n\n\n

A reverse split, like a regular stock split, is therefore primarily a measure to increase the attractiveness of the company's own securities. With this step, the company aims to stimulate demand and increase trading volumes on the stock exchanges.\u00a0<\/p>\n\n\n\n

These conditions must be met for a share split<\/h3>\n\n\n\n

Although a share split does not appear to be a significant measure at first glance (the total value of all securities remains the same), one important condition must be met: The shareholders must vote in favor of the split at the Annual General Meeting.\u00a0<\/p>\n\n\n\n

A simple majority is sufficient for this. The shareholders also determine the ratio of the share split. In other words, they decide how many parts each security should be split into. As each new share has exactly the same proportionate value as the original security and a share split is generally regarded as a positive signal, shareholders give their approval relatively often.\u00a0<\/p>\n\n\n\n

As a reverse stock split, i.e. the consolidation of shares, is formally the same process, the same rules apply: Shareholders must vote in favor of the move by a simple majority at the Annual General Meeting and determine the ratio in which the number of shares is to be reduced.\u00a0\u00a0<\/p>\n\n\n\n

Stock split - good or bad?<\/h3>\n\n\n\n

Investors regularly ask themselves the question: Is a stock split good or bad? The correct answer would be: Neither, because the split initially has no effect on our investment or the share price.\u00a0<\/p>\n\n\n\n

However, a stock split is generally regarded as a positive signal and is often linked to further price gains in the following weeks. After all, the shares have gained so much in value that a stock split is intended to make them affordable again. This increase in value is a clear sign that the company is developing positively!<\/p>\n\n\n\n

The reverse stock split, on the other hand, tends to be seen as a bad sign and can often result in further losses. Many investors see the reverse stock split as a clear warning signal and decide to reduce their investment or sell it altogether.\u00a0<\/p>\n\n\n\n

Other investors, however, see a reverse stock split as a positive signal that heralds a trend reversal and an upswing. Which of the two groups is right naturally varies from case to case. There is therefore no general answer as to whether a reverse stock split is good or bad.\u00a0<\/p>\n\n\n\n

From the field: important stock splits<\/h3>\n\n\n\n

Some of the world's most valuable companies have already carried out multiple share splits in order to keep their securities affordable despite massively increased share prices. Apple's denominations are particularly well known: its rapid growth has already led to two share splits in the recent past.\u00a0<\/p>\n\n\n\n

In June 2014, each Apple share (price at the time: 646 dollars) was divided into seven new shares at 92 dollars each. As the price gains continued, a new share split was scheduled in August 2020: Each security was divided into four new shares.\u00a0<\/p>\n\n\n\n

Alphabet and Amazon also experienced very significant share splits. Both companies split their securities in the summer of 2020 at a very high ratio of 1 to 20, meaning that holders of Alphabet or Amazon shares had the same value in their securities account on the reporting date, but spread across 20 securities.\u00a0<\/p>\n\n\n\n

Among German companies, Lang & Schwarz (February 2022, ratio 1 to 3) and Bechtle (August 2021, ratio 1 to 2) were the last to split their shares. Commerzbank is one of the few examples of a reverse stock split.\u00a0<\/p>\n\n\n\n

In 2013, the company carried out a reverse split at a ratio of 10 to 1. This means that investors who previously held ten shares in the company in their securities account now only held one share on the reporting date, but with the value of ten previous shares.\u00a0<\/p>\n\n\n\n

Carry out a corporate action with CapTrader<\/h3>\n\n\n\n

As a shareholder, you can participate in various corporate actions when the company decides to take such action. In your account management (Client Portal) at CapTrader, you make your selection of corporate action with just a few clicks.
In general, the Annual General Meeting can decide on various types of corporate actions, such as distributing profits to shareholders in the form of cash (cash dividend) or in the form of shares (stock dividend). Use our guide to help you choose a corporate action: Select corporate actions<\/a>.<\/p>","protected":false},"author":20,"featured_media":0,"template":"","class_list":["post-45294","glossar","type-glossar","status-publish","hentry"],"acf":{"blog_summary":"","blog_faq_schalter":"nein","faq_uberschrift":"","blog_faq_loop":null},"_links":{"self":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/glossar\/45294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/glossar"}],"about":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/types\/glossar"}],"author":[{"embeddable":true,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/users\/20"}],"wp:attachment":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/media?parent=45294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}