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The last split refers to the number of shares that are distributed after a stock split takes place. In most situations, the term also refers to the date that the actual distribution of shares is made, after the stock split has occurred. A last split is important to investors, both in terms of identifying the number of shares they will receive, and the date the shares are issued to them, since this can impact the amount of the tax obligation investors will owe on those new shares.
The stock split itself is the process that is used to divide currently existing shares into multiple shares. It is important to note that even when a company decides to split the currently issued shares of stock, this does not have a detrimental effect on the value of those shares at the time the split occurs. For example, if the shares were valued at $10 US dollars (USD) just prior to the split, all the new shares will still have that same value immediately after the split. Once the split is complete, then all the shares may increase or decrease in value, based on their performance in the marketplace.
With the last split, the logistics of how the existing shares are split into multiple shares is finally disclosed, and investors know what to expect in terms of share distribution. Should an investor own a thousand shares when the stock splits at a two for one ratio, then the investor knows that as of the last split, he or she now owns two thousand shares. This is important, since the number of shares held will have a direct impact on the amount of dividends that the investor will receive from those holdings.
At the same time, investors need to be aware of the date that those shares are distributed to them once the stock has been split. In this instance, the last split date serves as the acquisition date, or the date that the investors gain ownership of the shares. Depending on the tax laws that prevail in the nation where the investor resides, identifying this date can be very important, since it is the date of the last split that the returns from the holdings will begin to generate a tax obligation. A financial analyst can advise the investor of how taxes on the returns are calculated during the year where the stock split takes place, and how those taxes apply if the investor chooses to sell those additional shares during that same tax year.