Do corporate stock splits negate share repurchase programs?
No, I think you are misunderstanding the Math. Stock splits are a way to control relatively where the price per share can be for a company as companies can split or reverse split shares which would be similar to taking dimes and giving 2 nickels for each dime, each is 10 cents but the number of coins has varied. This doesn't create any additional value since it is still 10 cents whether it is 1 dime or 2 nickels.  Share repurchase programs though are done to prevent dilution as executives and those with incentive-stock options may get shares in the company that increase the number of outstanding shares that would be something to note. Companies do both quite often.  They have opposite effects on the share price, but not on the total value to the shareholders.  Doing both causes value to shareholders to rise (ie, any un-bought back shares now own a larger percentage of the company and are worth more) and drops the per-share price (so it is easier to buy a share of the stock).  To some that's irrelevant, but some might want a share of an otherwise-expensive stock without paying $700 for it. As a specific example of this, Apple (APPL) split its stock in 2014 and also continued a significant buyback program: Apple announces $17B repurchase program, Oct 2014 Apple stock splits 7-to-1 in June 2014. This led to their stock in total being worth more, but costing substantially less per share.
"The key difference I've found between a stock split and a stock dividend – of the exact same stock and class, as opposed to a spin-off – seems to be from the company's own accounting perspective.  There doesn't appear to be any actual transfer of value to the shareholder with either kind of transaction; i.e. in theory, each transaction would be immaterial to the value of your holdings. With respect to the company's accounting, a stock split affects the par value of the shares, whereas a stock dividend reduces the retained earnings account in order to increase paid-in or contributed capital. I found a good online source which explains the history behind this accounting difference: McGraw-Hill - Intermediate Accounting eBook, 6/e - Chapter 18 - Stock Dividends and Splits. Small quote: [...]   Besides being based on fallacious reasoning, accounting for stock   dividends by artificially reclassifying “earned” capital as “invested”   capital conflicts with the reporting objective of reporting   shareholders' equity by source. Despite these limitations, this   outdated accounting standard still applies. Since neither the corporation nor its shareholders apparently benefits   from stock dividends, why do companies declare them?23 Occasionally, a   company tries to give shareholders the illusion that they are   receiving a real dividend. Another reason is merely to enable the corporation to take advantage   of the accepted accounting practice of capitalizing retained earnings.   Specifically, a company might wish to reduce an existing balance in   retained earnings—otherwise available for cash dividends—so it can   reinvest the earned assets represented by that balance without   carrying a large balance in retained earnings. [...] There's a lot more on that page, before and after, worth reading. From another book: Google Books - Comparative Income Taxation, a Structural Analysis - page 314 - Stock Dividends. Small quote: The distribution of dividends in the form of stock or ""bonus"" shares   to existing shareholders typically involves a transfer for corporate   law purposes of retained earnings into stated capital.   It can been [sic] viewed as a deemed distribution of a cash   dividend to the shareholders followed by a corresponding contribution   to capital or as solely as an event at the corporate level which has   no effect on the shareholders whose economic interest in the   corporation is unchanged by the receipt of additional shares. The   systems have taken varied approaches to the stock dividend problem.    The treatment is in part a function of the rules dealing with   distributions of stated capital. [emphases above are mine] [... continues w/descriptions of different countries' tax treatments of the kinds of stock dividends. Includes U.S., Sweden, Japan,   Netherlands, Canada, Australia, U.K., France, Germany. ...] As far as why a corporation might want to capitalize earnings and reduce the equity otherwise available for dividends, I can only imagine that, ignoring taxes for a moment, that it may have something to do with capital ratios that need to be maintained for financing or regulatory purposes?  Yet, I remain curious. If I discover more on this then I'll update my answer. Additional resources:" "I don't have anything definitive, but in general positions in a company are not affected materially by what is called a corporate action. ""Corp Actions"" can really be anything that affects the details of a stock. Common examples are a ticker change, or exchange change, IPO (ie a new ticker), doing a split, or merging with another ticker. All of these events do not change the total value of people's positions. If a stock splits, you might have more shares, but they are worth less per share. A merger is quite similar to a split. The old company's stock is converted two the new companies stock at some ratio (ie 10 shares become 1 share) and then converted 1-to-1 to the new symbol. Shorting a stock that splits is no different. You shorted 10 shares, but after the split those are now 100 shares, when you exit the position you have to deliver back 100 ""new"" shares, though dollar-for-dollar they are the same total value. I don't see why a merger would affect your short position. The only difference is you are now shorting a different company, so when you exit the position you'll have to deliver shares of the new company back to the brokerage where you ""borrowed"" the shares you shorted." Any time there is a share adjustment from spin-off, merger, stock split, or reverse slit; there is zero chance for the stockholders to hang on to fractional shares. They are turned into cash.   For the employees in the 401K program or investors via a mutual fund or ETF this isn't a problem. Because the fraction of a share left over is compared to the thousands or millions of shares owned by the fund as a collective. For the individual investor in the company this can be a problem that they aren't happy about.  In some cases the fractional share is a byproduct that will result from any of these events. In the case of a corporate merger or spin-off most investors will not have an integer number of shares, so that fraction leftover that gets converted to cash isn't a big deal. When they want to boost the price to a specific range to meet a regulatory requirement, they are getting desperate and don't care that some will be forced out. In other cases it is by design to force many shareholders out. They want to go private. They to 1-for-1000 split. If you had less than 1000 shares pre-split then you will end up with zero shares plus cash. They know exactly what number to use. The result after the split is that the number of investors is small enough they they can now fall under a different set of regulations. They have gone dark, they don't have to file as many reports, and they can keep control of the company.  Once the Board of Directors or the majority stockholders votes on this, the small investors have no choice. Stock splits are typically done to increase the liquidity of stock merely by converting every stock of the company into multiple stocks of lower face value. For example, if the initial face value of the stock was $10 and the stock got split 10:1, the new face value of the stock would be $1 each. This has a proportional effect on the market value of the stock also. If the stock was trading at $50, after the split the stock should ideally adjust to $5. This is to ensure that despite the stock split, the market capitalization of the company should remain the same. Number of Shares * Stock Price = Market Capitalization = CONSTANT "Yes and no.  There are different classes of shares - Some have voting rights, some *don't*.  Some take precedence over others in a bankruptcy.  Some get larger dividends.  ""Common"" isn't really a useful description of your stake in the company.  You *do* have a ""stake"" in the company, but not all shares are equal." Most corporations have a limit on the number of shares that they can issue, which is written into their corporate charter.  They usually sell a number that is fewer than the maximum authorized number so that they have a reserve for secondary offerings, employee incentives, etc. In a scrip dividend, the company is distributing authorized shares that were not previously issued.  This reduces the number of shares that it has to sell in the future to raise capital, so it reduces the assets of the company. In a split, every share (including the authorized shares that haven't been distributed) are divided.  This results in more total shares (which then trade at a price that's roughly proportional to the split), but it does not reduce the assets of the company. You didn't give enough information.  What is your goal?  What is your financial situation?   A discount to buy company stock can seem very tempting.  I was tempted by it myself, gee, almost 20 years ago.  I still own some of the stock.  But I held mutual funds first. There are two disadvantages that have disuaded me from partaking in the ESPP of my subsequent employers (one of which was a spin-out company of the stock-issuing company, the other having bought the spin-out).  First, putting a bunch of money in a single stock is rather risky.  single stocks will drop dramatically due to market conditions.  Generally market conditions don't act so dramatically on all stock.  Second, is it wise to put not only your salary but also your saved wealth all in one basket? It worked out reasonably well for me.  The stock doubled right before my division was spun out -- I sold half of my position.    And the resulting stock has continued to provide opportunities to diversify.  However, it could have just as easily dropped in half instead of doubled. What is your timeline for holding the stock -- for realizing any gain?  Can you afford patience if the stock value should drop in half? I have co-workers who continue to invest through our new company's ESPP.  At least one co-worker has the stated goal to sell after every purchase -- he holds the stock long enough to make a long-term gain instead of short term, but he sells after every purchase.  And it seems to him that the stock always drops right when he wants to sell. Pre-Enron many companies forced the 401K match to be in company shares. That is no longer allowed becasue of changes in the law. Therefore most employees have only a small minority of their retirement savings in company shares. I know the ESOP and 401K aren't the same, but in my company every year the number of participants in the company stock purchase program decreases. The small number of participants and the small portion of their new retirement funds being in company shares would mean this spike in volume would be very small.  The ESOP plan for my employer takes money each paycheck, then purchases the shares once a quarter. This delay would allow them to manage the purchases better. I know with a previous employer most ESOP participants only held the shares for the minimum time, thus providing a steady steam of shares being sold.