A company's stock split history is a listing of all of the times in which the company has split its shares into multiple units, according to Texas Instruments and Investopedia. A stock split keeps the shares' total dollar value constant. The effect is multiplying the share number, not the value.
The most frequent stock split ratios are either 2-for-1 or 3-for-1. This ratio means that stockholders have either two or three shares for every one share they had before the split. For example, the ZZZ corporation has 5 million outstanding shares trading at $50 apiece. Taken together, this is a market capitalization of $250 million. The board of directors chooses a 3-for-1 stock split. This means that the company now has 15 million shares outstanding, but the market capitalization remains at $250 million, reports Investopedia.
Splits commonly happen when the price of a share of stock is high enough to make investors think twice about purchasing an entire standard board lot (100 shares) of that stock. A $50 share price means an investor must spend $5,000 to get those 100 shares. Splitting the stock 3-to-1 brings that cost down to $1,667. This drop in share price makes the stock more liquid and boosts trading. Even though the split doesn't add any real value, the renewed interest often drives the price up, notes Investopedia.
One example of a company with a longstanding stock history is Texas Instruments (stock ticker listing: TXN). Between 1963 and 2000, the company announced eight different stock splits. The first one was a 5-to-4 split, while the others have all been 3-for-1 or 2-for-1. Someone who bought 100 shares in the initial listing would now have 24,000 shares after all of those splits, notes Texas Instruments.