What does it mean to “split” a stock and why would a company choose to do it?

Question

I don’t invest in $GME, but I noticed their investors are very excited about the stock splitting later this month. What does that mean and what are the implications?

I gather that if you owned one stock, you’ll own four after the split, but I’m not really sure why that’s cause for so much celebration.

Thanks!

In: 5

Answer 1

It just makes the stock more granular in your ability to sell/buy. EG if the stock price was $1500 but you only had $1000 to invest, you couldn’t buy the stock.

Post stock split (let’s say it was a 3:1), you can now buy two stocks