Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Nobody
Lv 4
Nobody asked in Business & FinanceInvesting · 6 years ago

How do stock price splits work?

I know when companies decide that the prices are too high, they split the stock thus reducing the prices. What I don't understand is how it works on the charts. For instance, in Oct 2013, Google's price went past 1200 or something. Then they split it 2 for 1 and became ~600. I don't know about last year, but they split a couple months ago again from 1200-1300 to ~600. So I thought all of the prices will be adjusted, but price price from 2013 is shown as ~600, not ~300. I don't understand how the charts adjust the prices. Because if the price starts from 600 after the split in 2013, and risen to 1300 in 2015, and then there's a split, the price from 2013 should be shown as 300? Or there's something I missed

1 Answer

Relevance
  • ?
    Lv 7
    6 years ago

    If a stock splits two for one and its price is $100 at the split. It issues two shares for everyone you own (you have 10 and that goes to $20) and the price of the stock goes from$100 to $50 . No wealth is created or destroyed in that transaction

Still have questions? Get your answers by asking now.