A process that involves increasing the number of outstanding shares by issuing more shares to existing shareholders. The number of shares is increased by spitting each shares into some number of shares, as the issuing company deems fit. The increased number of shares will cause a reduction in the par value (face value) of the stock. For example, one share with a par value of $50 may be divided into 5 shares of $10 each. The moment the company declares a stock split, its stock starts trading at a corresponding fraction of the pre-split price.