Split Factor

Split factor of a stock is when a company multiplies the number of existing shares by a factor, and therefore, provides extra shares to its existing shareholders to keep their share percentage the same. To explain it with an example, suppose a company has a total of 1 million shares in the market and decides to split every share into three (i.e. a 3-for-1 or 3:1 stock split). This means that after the split, the company will have tripled the number of shares in the market to 3 million shares, and every shareholder will also also receive new shares, in this case the shareholders will receive 2 extra shares, meaning the shareholders will also triple their number of shares.

But the total worth of the company is still the same, because the price per share will get divided by the split factor. In our example, suppose the price per share was $30, then after the split of 3:1, it will become $10.

While splitting shares does not effect the company's net worth, it is seen as an encouragement for smaller investors to buy the company's shares, since the price is lower now.

Split factor is different from stock dilution, where the ownership percentage of each shareholder is reduced when the number of shares is increased.

Last Split Factor

Last split factor is the latest split that the company has done, example: AAPL did a seven-for-one split (7:1) on June 9, 2014.