What does this stock split mean?

Question

"Stratasys, Inc. (Nasdaq:SSYS) said that its board has approved a 2-for-1 stock split of the company's common stock, to be effected in the form of a common stock dividend.
Each shareholder of record at the close of business on Aug. 15 will receive one additional share for every outstanding share held on that date." - Reuters

Does that mean if I have 100 shares worth $50 each, it will become 200 shares worth $25 each? I don't understand the "common stock dividend" part.

Or does it mean I will have 100 shares worth $25 and recieve 100 dividends of $25 each?

Thanks for all the answers! I wanted to pick each answer as best answer but I couldn't decide so it's up for vote.

Answer 1

Well, you get double the shares, but it will be the price that it is on the day it splits. From now until the stock splits, people are not allowed to buy any.

So, if you have 100 shares today at $100/share, but it is at $120 when it splits (it usually goes up after a split is announced), then you will then have 100 shares at $60 each.

This is a good thing. See, as it is now, if the price goes up $1, then you make $100 because you have 100 share. But, after the split, when the price goes up $1, you make $200 because you now have 200 share.

They split stocks like this to make it easier to buy shares. After the price gets to a certain point, people won't look at it as one to buy.

Answer 2

You got it correct, it means you will have 200 shares worth $25 apiece. It is an accounting transaction and nothing more, although it is technically different from a stock split.

A split just doubles the shares, a stock dividend actually reduces retained earnings and adds to paid in capital and capital paid in excess of par. Still, from a cash flows perspective, it does not matter at all.

Answer 3

It's a reverse split. For every 10 you have, you now have one. So you roughly have 112 shares of your stock. Am I right? Yes I am. 1122@.42 is about $471 initial buy. After reverse split, 112@4.89 is about $548. Just give me the ten points. If you owned 11220 shares at $4.89 you would have $54, 866, and I now that is not the case.

Answer 4

That's exactly what it means. The mechanism for you to get the extra 100 shares is a common stock dividend. They'll give you a dividend of 1 share for each share you own.

Answer 5

You will end up with 2x the number of shares you own now on Aug 15. The shares will be dividended to you (this just refers to the tax treatment) and will likely end up in your brokerage account if that is where shares are held.

The share price will be cut in half on Aug 15 and will float freely then on.

Answer 6

it means halving the company stock to be more affordable for the public. but the downside the number of shares gets increased. like $100 in 1 million shares, after split, its $50 in 2 million shares. hope this helps.