Stock split

Recording a split — more shares, lower nominal value, same capital. Including how to tell it apart from a reverse split, and why the share count is the only reliable tell.

Overview

A stock split divides existing shares into a greater number of smaller ones.

Share count goes up
Nominal value per share goes down
Share capital is unchanged — count × nominal is the same before and after
Nobody's proportion changes — every holder's percentage is exactly what it was

So it is a re-denomination rather than a transaction between parties. Nothing moves and nobody gains.

A four-for-one split turns 1,000 shares of €10 into 4,000 shares of €2.50. Capital stays at €10,000, and a holder with 10% still has 10%.

What you'll learn

What a split does to the numbers
How to tell a split from a reverse split when choosing
Why splits happen in an LBO
The one check that proves it was recorded correctly

Telling the two apart

The distinguisher is the share count: a split gives you more shares, a reverse split fewer.

Before you start

You need the resolution that authorised the split. That is what the Document Checklist expects.

Steps

From the company navigation, open Timeline. It lists the company's events.
Select Record past event. Give the event an Event Label, then under Choose Decisions pick Stock Split.
Upload the authorising resolution.
Analyse.
Read the result, then check and correct in the decision.

Why a split happens in an LBO

Usually to make the arithmetic work for something else:

To allow finer allocations. A management package allocating small percentages is easier to express with more, smaller shares. Splitting before a wave avoids fractional shares later.
To reach a round nominal value ahead of a new issuance.
To align classes where tranches were issued at different nominal values.

The split is rarely the point. It is the tidying that lets the next thing be clean — so expect to find it in the same event as whatever motivated it.

The check that proves it

Share capital is unchanged. Count × nominal before should equal count × nominal after. If share capital moved, what you recorded was not a split.

Then:

Every proportion is unchanged. No holder's percentage should differ.
The ratio is consistent across holders. Every holding multiplies by the same factor.
Nominal value went down. If it went up, you have recorded a reverse split.

Common problems

Share capital changed. Not a split. Something else is in the decision.

A holder's percentage moved. Same conclusion — check for a mixed-in issuance or transfer.

You cannot tell which split type you need. Ask what happens to the share count.

Fractional shares appear. The ratio does not divide the existing holdings evenly. That is a problem with the split as authorised rather than a recording error — check the resolution.