A stock split occurs when a listed company changes the number of shares outstanding. When the number of shares is increased, it is called a forward split. When the number of shares is decreased, it is called a reverse split.
If the price of a stock is high, investors may not want or be able to buy that stock. In this case, the listed company may consider a forward split so that the number of shares will increase and the price of each share will be lower. After a forward split, the listed company's shareholders' equity and market capitalization will remain unchanged. A temporary stock symbol may be used during the forward split, but it will eventually revert back to the original stock symbol.
If the price of a stock is low, the listed company may consolidate the number of its existing shares into fewer shares. After a reverse split, the number of shares will decrease and the price of each share will increase. The listed company's shareholders' equity and market capitalization will remain unchanged.
The part that is less than one share after a reverse split will be returned to investors in the form of residual value.