Definition: When the number of shares of a stock is increased but the price per share decreases. Companies typically do this when the stock price gets too high for small investors to be able to afford a share.
TeenAnalyst Advice: For example, if a stock is at $100 per share, the management might decide to do a 2-for-1 split and decrease the price to $50 per share but give each person twice as many shares. This is often a gimmick and has no real importance to how the company will do in the future.
Think of it this way...if you gave me a quarter and I gave you back two dimes and a nickel, you still have the same amount of money. And it's no sign of how much money you'll have in the future.