Why have I never seen a stock split?
Are you sure you're not just looking at prices that are adjusted for the split, e.g. Yahoo? For example, Gilead Sciences (GILD) split a few months ago, but if you look at a price chart, there isn't an interruption even though the split is clearly marked. (Look in the past six months; it split in January). However, you could also simply be watching companies that happen to not split, for a variety of reasons. This isn't a criticism, but rather just a consequence of whatever stocks you happen to be watching.  However, a quick search for information on stock splits yields a few articles (mainly from the Motley Fool) that argue that fewer companies are performing stock splits in recent years; the articles mainly talk about tech companies, and they make the argument that even though the shares in Google and Apple have a high stock price: Google and Apple aren't all that expensive by traditional valuation   metrics. Google trades at just 15 times next year's projected   profitability. Apple fetches a mere 13 times fiscal 2012's bottom-line estimates. These articles are a bit dated in terms of the stock prices, but the rationale is probably still good. Similar logic could apply for other companies; for example, since May 2009, Panera's stock price has climbed by almost a factor of 4 without splitting. The articles also make the point that stock splits were traditionally seen as bullish signs because: Companies splitting to bring their share prices back down to more   accessible levels were optimistic in building those sand castles back   up. One could make a fair argument that the overall economic climate isn't as bullish as it used to be, although I would only be convinced that this was affecting stock splits if data could be gathered and tested. A stock split can also raise the price of a stock because if small investors feel the stock is suddenly more accessible to them, they purchase more of it and might therefore drive up the price. (See the Investopedia article on stock splits for more information). Companies might not see the necessity in doing this because their stock price isn't high enough to warrant a split or because the price isn't high enough to outprice smaller investors.  One interesting point to make, however, is that even though stock splits can drive small investors to buy more of the stock, this isn't always a gain for the company because professional investors (firms, institutions, etc.) have a tendency to sell after a split. The paper is a bit old, but it's still a very neat read. It's possible that more and more companies no longer see any advantage to splitting because it might not affect their stock price in the long run, and arguably could even hurt it. Considering that large/professional investors likely hold a higher percentage of a company's shares than smaller investors, if a stock split triggers a wave of selling by the former, the increasing propensity to buy of the latter may not be enough to offset the decline in price.  Note: My answer only refers to standard stock splits; the reasons above may not apply to a decrease in the number of reverse stock splits (which may not be a phenomenon; I don't know). You haven't seen one because you haven't looked for one properly. You can set a google alert for stock split and get information about major issues splitting their stocks quite regularly, as well as a daily dose of recommendations from people without a say in the matter for big companies to split their stock. Stock splits are announced in advance by company management. If you want to see one split, well, a reverse split anyway, keep an eye on TZA, FAZ, BGZ, and any Direxion fund.  These funds decay continuously forever.  Once they get close to $10-$15 or so, they reverse-split them back to the $30-$50 range and the process starts over.  This happens about once a year. A few years ago I sent Direxion an email asking what happens when they run out of shares to reverse split and the reply was that's its an open fund where shares can be created or redeemed at will.  That still didn't answer the question of what happens when they run out of shares.  If they create new shares, the price will drop below the $10 level where many fund managers aren't allowed to buy.
Berkshire Hathaway would be a good example of a company that has yet to pay dividends, yet is a highly valued stock. A couple of key points here to note is how on the first hand you have that the dividend policy will never change, yet couldn't one argue that there will always be new investors wanting more shares and thus the price keeps going up until someone gains control and decides to issue dividends?  I'm just pointing out how on the one hand you are claiming a never changing and yet on the other thinking there will be a termination when the reality is that unless there is a zombie apocalypse of some form, life will continue and there will be new people to want to buy the stock and some people be willing to sell at the new prices. "Their is no arbitrage opportunity with ""buying dividends."" You're buying a taxable event. This is a largely misunderstood topic. The stock always drops by the amount if the dividend on the ex date. The stock opens that day trading ""ex"" (excluding) the dividend. It then pays out later based in the shareholders on record.  There is a lot of talk about price movement and value here. That can happen but it's from trading not from the dividend per se. Yes sometimes you do see a stock pop the day prior to ex date because people are buying the stock for the dividend but the trading aspect of a stock is determined by supply and demand from people trading the stock.  The dividends are paid out from the owners equity section of the balance sheet. This is a return of equity to shareholders. The idea is to give owners of the company some of their investment back (from when they bought the stock) without having the owners sell the shares of the company. After all if it's a good company you want to keep holding it so it will appreciate.  Another similar way to think of it is like a bonds interest payment.  People sometimes forget when trading that these are actual companies meant to be invested in. Your buying an ownership in the company with your cash.  It really makes no difference to buy the dividend or not, all other things constant. Though market activity can add or lose value from trading as normal." "The share price on its own has little relevance without looking at variations. In your case, if the stock went from 2.80 to 0.33, you should care only about the 88% drop in value, not what it means in pre-split dollar values. You are correct that you can ""un-split"" to give you an idea of what would have been the dollar value but that should not give you any more information than the variation of 88% would. As for your title question, you should read the chart as if no split occurred as for most intents and purposes it should not affect stock price other than the obvious split." "The S&P 500 is an index. This refers to a specific collection of securities which is held in perfect proportion. The dollar value of an index is scaled arbitrarily and is based off of an arbitrary starting price. (Side note: this is why an index never has a ""split""). Lets look at what assumptions are included in the pricing of an index: All securities are held in perfect proportion. This means that if you invest $100 in the index you will receive 0.2746 shares of IBM, 0.000478 shares of General Motors, etc. Also, if a security is added/dropped from the list, you are immediately rebalancing the remaining money. Zero commissions are charged. When the index is calculated, they are using the current price (last trade) of the underlying securities, they are not actually purchasing them. Therefore it assumes that securities may be purchased without commission or other liquidity costs. Also closely related is the following. The current price has full liquidity. If the last quoted price is $20 for a security, the index assumes that you can purchase an arbitrary amount of the security at that price with a counterparty that is willing to trade. Dividends are distributed immediately. If you own 500 equities, and most distributed dividends quarterly, this means you will receive on average 4 dividends per day. Management is free. All equities can be purchased with zero research and administrative costs. There is no gains tax. Trading required by the assumptions above would change your holdings constantly and you are exempt from short-term or long-term capital gains taxes. Each one of these assumptions is, of course, invalid. And the fund which endeavors to track the index must make several decisions in how to closely track the index while avoiding the problems (costs) caused by the assumptions. These are shortcuts or ""approximations"". Each shortcut leads to performance which does not exactly match the index. Management fees. Fees are charged to the investor as load, annual fees and/or redemptions. Securities are purchased at real prices. If Facebook were removed from the S&P 500 overnight tonight, the fund would sell its shares at the price buyers are bidding the next market day at 09:30. This could be significantly different than the price today, which the index records. Securities are purchased in blocks. Rather than buying 0.000478 shares of General Motors each time someone invests a dollar, they wait for a few people and then buy a full share or a round lot. Securities are substituted. With lots of analysis, it may be determined that two stocks move in tandem. The fund may purchase two shares of General Motors rather than one of General Motors and Ford. This halves transaction costs. Debt is used. As part of substitution, equities may be replaced by options. Option pricing shows that ownership of options is equivalent to holding an amount of debt. Other forms of leverage may also be employed to achieve desired market exposure. See also: beta.  Dividends are bundled. VFINX, the largest S&P 500 tracking fund, pays dividends quarterly rather than immediately as earned. The dividend money which is not paid to you is either deployed to buy other securities or put into a sinking fund for payment. There are many reasons why you can't get the actual performance quoted in an index. And for other more exotic indices, like VIX the volatility index, even more so. The best you can do is work with someone that has a good reputation and measure their performance." The stock split, it is similar to what happened to Apple a little while back. When Google split 2 to 1, it means that each share holder got 2 shares for each 1 share they had and each share was 1/2 the price. From Investopedia, A stock split is usually done by companies that have seen their share   price increase to levels that are either too high or are beyond the   price levels of similar companies in their sector. The primary motive   is to make shares seem more affordable to small investors even though   the underlying value of the company has not changed. From Wikipedia, It is often claimed that stock splits, in and of themselves, lead to   higher stock prices; research, however, does not bear this out. What   is true is that stock splits are usually initiated after a large run   up in share price...stock splits do increase the liquidity of a stock;   there are more buyers and sellers for 10 shares at $10 than 1 share at   $100. Some companies have the opposite strategy: by refusing to split   the stock and keeping the price high, they reduce trading volume.   Berkshire Hathaway is a notable example of this. Something more to munch on, Why Warren Buffett Is Against Stock Splits. The bonus share also improves the liquidity however there is some difference in treatment. Lets say a company has 100 shares, of $10 ea. The total capital of the compnay is 100*10 = 1000. Assuming the company is doing well, its share is now available in the market for $100 ea. Now lets say the company has made a profit of $1000 and this also gets factored into the price of $100. Lets say the company decides to keep this $1000 kept as Cash Reserve and is not distributed as dividends.   In a share split say (1:1), the book value of each share is now reduced to $5, the number of shares increase to 200. The share capital stays at 200*5 = 1000. The market value of shares come down to $50 ea.   In a Bonus share issue say (1:1), the funds $1000 are moved from Cash Reserve and transferred to share capital. The book value of each share will remain same as $10, the number of shares increase to 200. The share capital increases to 200*10 = 2000. The market value of shares come down to $50 ea.   So essentially from a liquidity point of view both give the same benefit. As to why some companies issue bonus and not a split, this is because of multiple reasons. A split beyond a point cannot be done, ie $10 can be split to $1 ea but it doesn't look good to make it $0.50. The other reason is there is adequate cash reserve and you want to convert this into share holders capital. Having a larger share holders capital improves some of the health ratios for the compnay. At times bouns is used to play upon that one is getting something free. "TLDR:  Why can't banks give me my money? We don't have your money. Who has my money? About half a dozen different people all over the world. And we need to coordinate with them and their banks to get you your money. I love how everyone seems to think that the securities industry has super powers.  Believe me, even with T+3, you won't believe how many trades fail to settle properly.  Yes, your trade is pretty simple. But Cash Equity trades in general can be very complicated (for the layman).  Your sell order will have been pushed onto an algorithmic platform, aggregated with other sell order, and crossed with internal buy orders. The surplus would then be split out by the algo to try and get the best price based on ""orders"" on the market.  Finally the ""fills"" are used in settlement, which could potentially have been filled in multiple trades against multiple counterparties. In order to guarantee that the money can be in your account, we need 3 days. Also remember, we aren't JUST looking at your transaction. Each bank is looking to square off all the different trades between all their counter parties over a single day. Thousands of transactions/fills may have to be processed just for a single name. Finally because, there a many many transactions that do not settle automatically, our settlements team needs to co-ordinate with the other bank to make sure that you get your money. Bear in mind, banks being banks, we are working with systems that are older than I am. *And all of the above is the ""simplest"" case, I haven't even factored in Dark Pools/Block trades, auctions, pre/post-market trading sessions, Foreign Exchange, Derivatives, KYC/AML." "The key difference I've found between a stock split and a stock dividend – of the exact same stock and class, as opposed to a spin-off – seems to be from the company's own accounting perspective.  There doesn't appear to be any actual transfer of value to the shareholder with either kind of transaction; i.e. in theory, each transaction would be immaterial to the value of your holdings. With respect to the company's accounting, a stock split affects the par value of the shares, whereas a stock dividend reduces the retained earnings account in order to increase paid-in or contributed capital. I found a good online source which explains the history behind this accounting difference: McGraw-Hill - Intermediate Accounting eBook, 6/e - Chapter 18 - Stock Dividends and Splits. Small quote: [...]   Besides being based on fallacious reasoning, accounting for stock   dividends by artificially reclassifying “earned” capital as “invested”   capital conflicts with the reporting objective of reporting   shareholders' equity by source. Despite these limitations, this   outdated accounting standard still applies. Since neither the corporation nor its shareholders apparently benefits   from stock dividends, why do companies declare them?23 Occasionally, a   company tries to give shareholders the illusion that they are   receiving a real dividend. Another reason is merely to enable the corporation to take advantage   of the accepted accounting practice of capitalizing retained earnings.   Specifically, a company might wish to reduce an existing balance in   retained earnings—otherwise available for cash dividends—so it can   reinvest the earned assets represented by that balance without   carrying a large balance in retained earnings. [...] There's a lot more on that page, before and after, worth reading. From another book: Google Books - Comparative Income Taxation, a Structural Analysis - page 314 - Stock Dividends. Small quote: The distribution of dividends in the form of stock or ""bonus"" shares   to existing shareholders typically involves a transfer for corporate   law purposes of retained earnings into stated capital.   It can been [sic] viewed as a deemed distribution of a cash   dividend to the shareholders followed by a corresponding contribution   to capital or as solely as an event at the corporate level which has   no effect on the shareholders whose economic interest in the   corporation is unchanged by the receipt of additional shares. The   systems have taken varied approaches to the stock dividend problem.    The treatment is in part a function of the rules dealing with   distributions of stated capital. [emphases above are mine] [... continues w/descriptions of different countries' tax treatments of the kinds of stock dividends. Includes U.S., Sweden, Japan,   Netherlands, Canada, Australia, U.K., France, Germany. ...] As far as why a corporation might want to capitalize earnings and reduce the equity otherwise available for dividends, I can only imagine that, ignoring taxes for a moment, that it may have something to do with capital ratios that need to be maintained for financing or regulatory purposes?  Yet, I remain curious. If I discover more on this then I'll update my answer. Additional resources:" In theory*, if a company has 1m shares at $10 and does a 10 for 1 split, then the day after it has 10m shares at $1 (assuming no market move). So both the price and the number of share change, keeping the total value of the company unchanged. Regarding your BIS, I suspect that the new number of shares has not been reported yet because it's an ETF (the number of shares in issue changes everyday due to in/out flows). Your TWX example is not ideal either because there was a spin off on the same day as the stock split so you need to separate the two effects. * Some studies have documented a positive stock split effect - one of the suggested reasons is that the stock becomes more liquid after the split. But other studies have rejected that conclusion, so you can probably safely consider that on average it will not have a material effect. Large-scale price range of a stock isn't directly meaningful; that reflects how many shares exist, not just how desirable they are. A stock split, for example, doubles the number of shares everyone holds while cutting the value of each share in half; that's meaningless except that it makes the shares a bit easier to trade in. Change in price is more interesting. In the case of energy companies, that often reflects major changes in energy supply, distribution, use, or how well positioned people feel the company is for the next change in these. Fracking's surge and the questions raised against it, whether a major pipeline will or won't be built, international energy price trends, breakthroughs in renewables... if it might affect energy price, it might affect the company's strength, both absolute and relative to others. In other words, the same kinds of things that affect any stock. I'm going to guess that you found this because of a stock screener.  This company went through a 1:20 reverse split on June 30, so every 20 shares outstanding became a single share.  Where before you had 20 shares worth $100 you now have 1 share worth $100, the value of the company doesn't change because of a split.  This company was never trading for $30+ per share.  Reverse splits are typical of a floundering company trading on an exchange that has a minimum share price requirement.  While reverse splits don't change the value of the company, just the number of shares outstanding and the price per share, no healthy company performs a reverse split.  Reverse splits are generally a massive signal to jump ship... The company seems to be trading for $1 right now, why the value fell from a pre-split $1.65 ($33/20) to $1 is anyone's guess; how the company ever got to $1.65 is also anyone's guess. But looking at the most recent 10-Q there are numerous causes for concern:  Note 2. Capital Stock On March 6, 2017, the Company issued as compensation for services provided a total of 650,000 common shares with a fair value of $390,000 to a third party. The fair value of the shares was based on the price quoted on the OTC pink sheets on the grant date. this indicates a share price of $0.60 ($390,000/650,000) as of 3/6/2017, just to reinforce that the google price chart doesn't show the true past but a past adjusted for the split Results of Operations The three months ended March 31, 2017 compared to the three months ended March 31, 2016 For the three months ended March 31, 2017 compared to the three months ended March 31, 2016, total revenues were $0 and $0, respectively, and net losses from operations were $414,663 and $26,260, respectively. The net losses were attributable to costs attributable to operating as a public company, in particular, common stock with a valuation of $390,000 that was issued to an investor relations firm in the first quarter of 2017. Going Concern As of March 31, 2017, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our proposed business. We have suffered recurring losses from operations since our inception. In addition, we have yet to generate an internal cash flow from our business operations or successfully raised the financing required to develop our proposed business. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern.    Liquidity and Capital Resources We had no cash as of the date of March 31, 2017. Additionally, since there is no balance sheet in the last 10-Q (another bad sign), the last annual report 10-K has this balance sheet: So the company: So why did the stock value plummet? It's anyones' guess but there is no shortage of ways to justify it.   In fact, it's reasonable to ask how is this company still worth $3mm ($1 * 3mm shares outstanding)... The real value of a share of stock is the current cash value of all dividends the owner will receive, plus the current cash value of the final liquidation if any.  Since people with different needs may judge the current cash value of an income stream differently, there would be a market basis for people to buy and sell stocks even if everyone could predict all future payouts perfectly. If shareholders knew that a company wouldn't pay any dividends until it was liquidated in the year 2066, whereupon it would pay $2000/share, then each share would in 2016 effectively be a fifty-year zero-coupon bond with a $2000 maturity value.  While some investors would be willing to trade in such an instrument, the amount of money a company could charge for such an instrument would be far lower than the money it could charge for one with payouts that were more evenly distributed through time. Since the founders of most companies want their companies to be around for a long time, that would mean that shareholders would have no expectation of their shares ever yielding anything of value within any foreseeable timeframe.  Even those who would be more interested in share-price appreciation than dividends wouldn't be able to see share prices rise if there wasn't any likelihood of the stock being bought by someone who wanted the dividends. "Diversification is extremely important and the one true ""Free Lunch"" of investing, meaning it can provide both greater returns and less risk than a portfolio that is not diversified. The reason people say otherwise is because they are talking about ""true"" portfolio diversification, which cannot be achieved by simply spreading money across stocks. To truly diversify a portfolio it must be diversified across multiple, unrelated ""Return Drivers."" I describe this throughout my best-selling book and am pleased to provide complimentary links to the following two chapters, where I discuss the lack of diversification from spreading money solely across stocks (including correlation tables), as well as the benefits of true portfolio diversification: Jackass Investing - Myth #8: Trading is Gambling – Investing is Safer Jackass Investing - Myth #20: There is No Free Lunch" You could use  the Gordon growth model implied expected return: P = D/(r-g) --&gt; r = D/P (forward dividend yield) + g (expected dividend growth). But obviously there is no such thing as a good market return proxy.