What is a Stock Split? Explaining the Mechanism and Notable Stocks Splitting in October 2026, Including Tokyo Electron, Tokio Marine HD, and Kioxia

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A stock split is one of the most important capital policies in stock investment that attracts significant attention from investors. From late September 2026 to the effective date of October 1, about 55 companies, mainly large-cap companies listed on the Tokyo Stock Exchange Prime Market, are implementing or planning stock splits. In this article, we will explain the basic mechanism of stock splits and the companies’ objectives, as well as the key points of the representative stocks that are currently in the spotlight.

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Basic Mechanism and Background of Stock Splits

A stock split is a measure in which a company divides its existing issued shares for free according to a predetermined split ratio, thereby increasing the number of shares outstanding.

Even if one share is split into multiple shares, the company’s total assets and its intrinsic corporate value, or market capitalization, do not change. Therefore, the theoretical stock price per share decreases according to the split ratio. For example, if a stock priced at 10,000 yen per share is split 1-for-2, the theoretical price becomes 5,000 yen, but since the number of shares held doubles, the total value of the assets held by the investor remains the same. A stock split is like cutting a cake of the same size into smaller pieces; for instance, an investor holding 100 shares will hold 200 shares after the split.

The background behind many large companies deciding to conduct stock splits in recent years includes the Tokyo Stock Exchange’s renewed request to lower investment units and the spread of the new NISA system. The TSE has been asking companies with high stock price levels to lower their investment units, and companies are deciding to split in response to this. Furthermore, the growing interest in stock investment among individual investors due to the spread of the new NISA system is also fueling this trend. The aim is to create an environment where individual investors can easily invest by lowering the unit price for stocks where the purchase amount for one unit (100 shares) has become too high due to soaring stock prices.

Tokyo Electron splits 1-for-5, Tokio Marine HD splits 1-for-15

We will introduce representative stocks that are attracting particular attention among the stock splits that will have an ex-rights date of September 29, 2026, and become effective on October 1. All of these are companies listed on the Tokyo Stock Exchange Prime Market. The ex-rights date is the first day on which you can no longer receive the rights of the stock split, and to be eligible for the split, you must purchase the stock by the previous business day.

Tokyo Electron (8035), a major semiconductor manufacturing equipment manufacturer, will implement a 1-for-5 stock split. The company’s stock price has been hovering in the 50,000 yen range, and the minimum investment amount has exceeded 5 million yen. This split will significantly lower the hurdle for purchase. Previously, it was a stock that was out of reach for general individual investors, but after the split, an expansion of the investor base is expected. The company continues to perform well due to the expansion of demand for AI servers for data centers, and improved liquidity after the split is expected.

Tokio Marine Holdings (8766), a major non-life insurance company, will conduct a bold 1-for-15 stock split. The 15-for-1 ratio is particularly large among the stocks splitting this time, and the effect of lowering the unit price is outstanding. From a level of about 8,000 yen per share and a minimum investment amount of about 800,000 yen, it will be possible to purchase it for less than 100,000 yen after the split. At the same time, it has newly established a shareholder benefit program such as electronic money, showing an eager stance toward expanding its individual investor base.

Splits in a wide range of industries, including Sumitomo Mitsui FG and Kioxia HD

Sumitomo Mitsui Financial Group (8316), one of the three major megabanks, will implement a 1-for-2 split. Like Tokio Marine HD, it has newly established shareholder benefits, aiming to broaden the base of investors. In terms of performance, the transition to a “world with interest rates” following the end of large-scale monetary easing and the growth of the retail service “Olive” are tailwinds.

Kioxia Holdings (285A), a major semiconductor memory manufacturer derived from Toshiba’s memory business, will implement a 1-for-3 stock split. The purpose is to adjust the unit price to one that is easy to invest in, out of consideration for individual investors who have felt that the stock price was too high to reach until now.

On October 1, other large, high-quality companies in a wide range of industries will also implement splits, including major developer Daiwa House Industry (1-for-2), major food company Nippon Ham (1-for-3), and Isetan Mitsukoshi Holdings (1-for-2), which is seeing strong demand from inbound tourists and domestic wealthy individuals. The fact that the movement toward splits is spreading regardless of industry or company size is a sign of companies’ stance to attract individual investors.

Benefits and points to note for investors

There are three main benefits for investors. First, small-lot investment and diversified investment become easier. Because the purchase unit price decreases, it becomes easier to invest without a large amount of capital, and it also becomes easier to manage risk by diversifying funds into multiple stocks. This effect is particularly significant for stocks where the minimum investment amount has reached hundreds of thousands to millions of yen.

Second, it becomes easier to effectively utilize the tax-exempt investment quota of NISA. It becomes easier to calculate and use up the quota to the limit according to the upper limit of the investment quota.

Third is the improvement of stock liquidity. Because trading in the market becomes more active, it becomes easier for trades to be executed smoothly. The fact that it becomes easier to buy and sell at the desired price is also an advantage for investors.

On the other hand, there are points to be aware of. At timings such as immediately after the announcement of the split or on the ex-rights date, buy orders and profit-taking sell orders may cross, and the stock price may fluctuate wildly in the short term. It is also necessary to keep in mind that trading expecting short-term price increases triggered by the split is likely to gather. Also, because the number of issued shares increases, the dividend per share will be reduced. However, since the number of shares held also increases, the total amount of dividends itself will generally not change.

Key points to check when making investment decisions on stock split companies

A stock split itself does not directly change a company’s financial condition or profitability. Therefore, it is important to avoid making simple decisions based on the idea of buying just because the stock price drops due to a split, and instead, to comprehensively check several points.

First, check the purpose of the split and the company’s announcements in their IR information. It is important to read from the information issued by the company whether the purpose of the split is to expand the individual investor base or to improve liquidity. Next, check past performance, financial status, and future growth strategies. A stock split only changes the investment unit, and the material for judging a company’s growth potential lies in its performance and financial content. Furthermore, it is necessary to pay attention to liquidity and market reaction after the split.

It is required to make investment decisions from a medium- to long-term perspective after determining whether the stock split is supported by strong performance and a growth story.

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