How Stock Split Ratios Work

Reading a split ratio

A ratio written as X-for-Y (sometimes X:Y) tells you how many new shares (X) you get for every old share (Y).

• 10-for-1: 1 share becomes 10. Price ÷ 10.
• 4-for-1: 1 share becomes 4. Price ÷ 4.
• 3-for-2: 2 shares become 3. Price × (2/3).
• 1-for-10 (reverse): 10 shares become 1. Price × 10.

Worked example

You own 50 shares of NVIDIA at $1,200 per share the day before its 10-for-1 split in June 2024. Total value: $60,000.

After the split:

• Shares: 50 × 10 = 500 shares
• Price: $1,200 ÷ 10 = $120 per share
• Total value: 500 × $120 = $60,000 (unchanged)

Cost basis after a split

Your cost basis per share is adjusted by the same ratio, but your total cost basis is unchanged. If you bought 10 shares at $500 (total $5,000) and the company did a 10-for-1 split, you now own 100 shares with a cost basis of $50 each — still $5,000 total.

Ratios only rearrange the math. The economic reality of your position doesn't change.