# What a Stock Split Does to Shares and Cost Basis

> A stock split changes the share count and the price per share. Total value and total cost stay the same. Here is a 4-for-1 example.

Source: MarketCapLens — https://www.marketcaplens.com/learn/what-a-stock-split-does
Updated: 2026-09-22

A stock split changes how many shares you hold and the price per share. It does not change what the position is worth, and it does not change your total cost. Only the per-share figures move.

**Key takeaways**

- New shares = old shares × (shares received ÷ shares exchanged).
- New price and new cost basis per share divide by that same factor.
- A 4-for-1 split turns 100 shares at $200, with a $150 basis, into **400** shares at **$50**, with a **$37.50** basis.
- Market value stays **$20,000**. Total cost stays **$15,000**.

## The formula

> **New shares = old shares × (shares received ÷ shares exchanged)**
>
> **New price = old price × (shares exchanged ÷ shares received)**

A 4-for-1 split is 4 shares received and 1 share exchanged. A 1-for-10 reverse split is 1 received and 10 exchanged. The reverse split cuts the share count and raises the price. The totals still match.

## A worked example

You hold **100** shares at **$200**, with a cost basis of **$150** a share. The company splits **4-for-1**.

- Factor = 4 ÷ 1 = 4.
- Shares = 100 × 4 = **400**.
- Price = $200 ÷ 4 = **$50**.
- Cost basis = $150 ÷ 4 = **$37.50**.
- Market value = 100 × $200 = **$20,000**, before and after.
- Total cost = 100 × $150 = **$15,000**, before and after.

The [stock split calculator](https://www.marketcaplens.com/tools/stock-split-calculator) applies that factor. A split does not, by itself, change market cap either. That point is in [what changes market cap](https://www.marketcaplens.com/learn/what-changes-market-cap).

## What the split adjustment tells you

It keeps your records in line with the new share count: more shares at a lower price, or fewer shares at a higher price, with the same total value and the same total cost.

## What the split adjustment leaves out

Brokers usually adjust the basis for you. This page is the arithmetic if you keep your own records. It does not apply a split to a live quote, and it does not handle a cash-and-stock deal or fractional shares your broker cashes out. Those can change the cash in the account.

[Apple](https://www.marketcaplens.com/company/AAPL) shows today's price and share count, with an as-of date. After a split, that page already reflects the new figures. The pre-split price is not still sitting there.

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*For general education only. Nothing here is investment advice.*

## Frequently asked questions

### How does a stock split change shares and price?

Multiply the share count by the shares you receive and divide by the shares you exchange. Divide the price and the per-share cost basis by that same factor. A 4-for-1 split turns 100 shares at $200 into 400 shares at $50. A $150 cost basis becomes $37.50 a share. The position is still worth $20,000.

### What do you enter for a reverse split?

Enter fewer shares received than shares exchanged. A 1-for-10 reverse split is 1 received and 10 exchanged. The share count falls and the price rises. Total value and total cost stay the same.