Issue forward split
What is an issue forward split?
An issue forward split increases the number of shares a company issues. But it does this without changing a company's value because the shares have a lower value.
Where have you heard about an issue forward split?
Companies announce when they are going to split shares. If are a shareholder, you may have seen an announcement from the company you have invested in.
What you need to know about issue forward splits.
An issue forward split is also known as a forward stock split. Different ratios are used in a split.
For example in a 3-1 split, a shareholder of 10,000 shares at $300 would hold 30,000 shares at $100 after the split. Total value of the holding remains unchanged.
Companies use forward splits to allow more investors to invest in stock at a lower price. The increased liquidity and greater investor pool can, but in no way guarantees, a share price rise.
An issue forward split is the opposite of a reverse stock split which is when shares are merged to reduce the number available without changing the total value.