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How do you create a stock split?
How do you create a stock split?

In the event you need to facilitate a stock split within your company, this is made very easy to manage within Ledgy.

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Written by Support Team
Updated over a week ago

What is a stock split?

A stock split happens when a company increases the number of its shares by an agreed amount, e.g. splitting 100 shares by a factor of 1:10 will result in 1000 shares, each share worth one-tenth of the original value, but the value in one's total holdings will remain the same.

The reason for a stock split can relate to liquidity and availability of the current stock allocation. In the event of a funding round or new employee stock option rollout, it may be prudent to increase the amount of stock available through a stock split so it can be reallocated more efficiently.

How to create a stock split on Ledgy

  1. Go to Ownership > Transactions

  2. In the top right, choose "+ Add transaction" > Other transactions

  3. Under the Stock Transactions section, click Stock Split

  4. Include the relevant information within the Date and Split factor fields

  5. Optional fields: Add any Internal notes and attach relevant documentation to the stock split transaction

  6. Click to Save in the bottom right corner

Note: Ledgy will offer an explanation for how the split will affect the shares going forward once added, as shown in the example below:

To review the changes, go to Ownership > Transactions and type 'Stock Split' in the search bar in the top left corner to find the relevant transaction.

Tip: You can also identify a Stock Split transaction with the light-pink SP icon.

Within the transaction bar, you will see the date it was created, the split factor, and the nominal value of the grants henceforth.

Note: Please keep in mind that the Stock Split does not retroactively change the nominal value of transactions created in the past and only affects active grants (non-terminated) at the time of the split. Any future grants will be subject to the new post-split nominal value.

Additionally, it's possible to check how any stock splits have affected the nominal value of the shares under Ownership > Share Classes > summary of Nominal value per share, as shown below:

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