A stock split is a corporate action where a company increases the number of shares by reducing the face value of the stock. Companies generally split shares to increase liquidity since the price of the stock reduces after the split. A split increases the number of shares by decreasing the face value, but the total value of the investment remains the same.
Most investors are more comfortable purchasing, say, 100 shares of a $10 stock as opposed to 1 share of a $1,000 stock. So when the share price has risen substantially, many public companies end up declaring a stock split to reduce it. Although the number of shares outstanding increases in a stock split, the total dollar value of the shares remains the same compared with pre-split amounts, because the split does not make the company more valuable.
A company's board of directors can choose to split the stock by any ratio. For example, a stock split may be 2-for-1, 3-for-1, 5-for-1, 10-for-1, 100-for-1, etc. A 3-for-1 stock split means that for every one share held by an investor, there will now be three. In other words, the number of outstanding shares in the market will triple.
On the other hand, the price per share after the 3-for-1 stock split will be reduced by dividing the old share price by 3. That's because a stock split does not alter the company's value as measured by market capitalization.
Tesla stock split, nvidia stock split and many other companies do stock splits
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