The stock market in the first half of 2026 is full of interesting movements. In particular, news of stock splits is constantly emerging, drawing the attention of investors. While it may seem like a simple act of increasing the number of shares, it contains important meanings related to corporate growth strategies and improving investor accessibility. Recently, semiconductor equipment company KLA, along with several Korean companies, have been carrying out stock splits, injecting vitality into the market.
While stock splits do not directly change a company’s value, they significantly impact market participants. This is largely due to their effect of lowering the price per share, making it accessible to more small-scale investors. What calculations do companies use to decide on stock splits, and how should investors view them? We will delve deeply into the background and impact through recent cases.
Why Do Companies Do Stock Splits?
A stock split is a method companies use to lower the stock price by increasing the number of shares when the price per share is too high, making trading inactive or inaccessible to small investors. For example, if a stock priced at 1 million won per share is split 1-for-10, it becomes 10 shares priced at 100,000 won each. The company’s total market capitalization and the total value of shareholders’ equity do not change.
- Improved Accessibility: High stock prices act as a barrier for small investors. By lowering the price per share through a split, more investors can purchase the stock. KLA’s Chief Financial Officer (CFO), Bren Higgins, directly stated that this stock split is intended to improve the accessibility and liquidity of KLA shares.
- Increased Liquidity: As the number of shares increases, the volume of shares traded in the market itself increases, leading to higher liquidity. This helps reduce the spread between bid and ask prices, allowing investors to trade at more favorable prices.
- Psychological Effect: When the stock price decreases, investors sometimes experience a psychological illusion that the stock appears cheaper. This stimulates buying sentiment, tending to increase trading volume.
What is the Impact on Investors?
A stock split has no impact on a company’s fundamentals. This is because the company’s profits or asset values do not change. However, investors experience several tangible changes. Especially for small investors, it can be a strategy that elicits a ‘better for me’ reaction.
- Expanded Opportunities for Small Investments: Even stocks that were previously high-priced can be invested in with small amounts after a stock split. This expands the investor base and increases public interest in specific companies.
- Activated Trading and Information Dissemination: As liquidity increases, trading in the stock becomes more active, and naturally, its mention in the media and communities also increases. Among Korean companies, Daehan Flour Mills, YC Chem, and POSCO Steelion also carried out stock splits in April 2026, increasing the number of shares held by shareholders. This can lead to increased interest in these companies’ stocks.
- Dividend Adjustment: After a stock split, the dividend per share is generally adjusted according to the split ratio. In KLA’s case, after a 10-for-1 split, the dividend per share is expected to change from $2.30 to $0.23. The total dividend amount remains the same, but shareholders will receive dividends through more shares.
‘Reverse Stock Split’ is Another Story
There is also the opposite concept of a stock split, called a reverse stock split. This is a method of raising the stock price by combining several shares into one. While a stock split aims to lower the stock price to increase accessibility, a reverse stock split is primarily used to meet listing requirements or improve a company’s image. For example, a company whose stock price is too low and facing delisting might artificially raise its stock price.
- Meeting Listing Requirements: Stock exchanges like Nasdaq have minimum price requirements for stocks. If a stock’s price does not meet these requirements, it can be delisted, but a reverse stock split can help avoid this. Recently, Aspire Biopharma announced it would implement a 1-for-30 reverse stock split to meet Nasdaq’s minimum bid price requirement for continued listing.
- Improving Corporate Image: Low-priced stocks, often called penny stocks, can give investors a negative impression. There are also attempts to raise the company’s ‘status’ by increasing the stock price through a reverse stock split.
Stock splits and reverse stock splits may seem like simple adjustments to the number of shares. However, beneath the surface, they are intricately linked to a company’s strategic decisions and market trends. The recent movements of KLA and Korean companies, as well as Aspire Biopharma’s reverse stock split case, clearly demonstrate how these strategies are being utilized in the 2026 stock market. Investors should not merely look at these corporate movements superficially but need a perspective that carefully analyzes their background and potential impact.