In a stock split, one share is converted into several: for example, at a one-to-ten ratio, the owner of one hundred shares receives one thousand, and the price of each decreases roughly tenfold. The investor's stake in the company's capital and the total value of their portfolio remain unchanged.
The purpose is typically to improve accessibility. If the price of one share becomes too high, a small investor finds it difficult to purchase the security or build a position of the desired size. A split lowers the entry barrier and typically increases the number of transactions and liquidity.
The reverse operation is consolidation, when several shares are combined into one with a price increase. It is used when the quote has fallen too low.
It is important to understand that a stock split does not create value. A company is worth exactly the same after it, and earnings per share and dividends per share are recalculated proportionally. When analyzing historical data, this must be taken into account: price charts and per-share metrics for past periods require adjustment for the split coefficient, otherwise the dynamics appear as a collapse.