Stock splits have been making news in the tech sector recently, especially after Facebook‘s (NASDAQ: FB) most recent earnings call.
Stock splits are often not well understood by investors. Shareholders tend to like them in part because a split creates the impression of owning more. Of course, having a 2-for-1 split does not mean you’re getting twice as much. It means a shareholder will now have two shares that are equal to what one was previously worth.