What is the procedure for a stock split with Exxon Mobil?


Quick Answer

As with most stocks, an Exxon Mobil stock split occurs when the company decides to increase or decrease the current amount of shares outstanding, explains Investopedia. Part of the procedure requires Exxon Mobil’s Board of Directors to approve the stock split.

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Full Answer

Exxon Mobil’s last stock split occurred in 2001, according to StockSplitHistory.com. The company offered a 2 for 1 split, meaning for every one share of stock an investor owned before the split, he now owned two shares of stock. If an investor owned 20,000 shares of stock prior to the split, the investor now owned 40,000 shares after the split. The value of Exxon stock does not decrease based on the stock split alone; however, the company now has a larger market capitalization in terms of number of shares, due to the split.

A traditional stock split, in which a company such as Exxon Mobil increases the number of shares outstanding, does not require approval from the Securities & Exchange Commission, explains The Motley Fool. However, a reverse stock split, in which companies decrease the amount of shares currently outstanding, requires that companies meet certain state laws. The Model Business Corporation Business Act, adopted by 24 states as of 2015, requires companies to amend their articles of incorporation to reflect the reverse stock splits.

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