What is a stock split and how does it impact you?
Recently, the board of directors of Eicher Motors approved a 10-for-1 stock split. Does this mean you have to forgo your shares or parts of them? Does this mean the value of your shares in Eicher Motors will slash? Does this mean your investment portfolio will carry a lower value after the stock split? But what is a stock split anyway? And why should you care? We’ll discuss that and more in this piece. Let’s dive right in. Introduction to the concept of a stock split As per Lexico, split means to “Break or cause to break forcibly into parts, especially into halves or along the grain”. Evidently, if you split a thing you own or enjoy, you will have to forgo a part of it. Does this mean you are at loss or gain? On the face of it, a split definitely seems like a loss. Unless you did it wholeheartedly. So, does this mean a stock split is bad for you as an investor? Well, not necessarily. More often than not, a stock split can be good news. Stock split meaning Simply put, a sto...