split adjusted
Split adjusted means a share's old price and volume have been recalculated to match a later stock split, so historical charts still make sense.
In plain English
Here is something that trips up a lot of new investors. A share price can fall by half overnight, and yet nobody has lost a single kobo. No crash, no bad news, no panic. Just a stock split, and a chart that suddenly looks like it is lying to you.
Say a company on the Nigerian Exchange had its shares trading at ₦20 each. The board decides to split each share into two, so anyone holding one share now holds two, each worth about ₦10. Your total investment has not changed. But if you pull up an old chart that has not been split adjusted, it will show the price dropping from ₦20 to ₦10 as if something terrible happened, when really nothing happened to your pocket at all.
This is why analysts and data providers go back and rewrite history, in a sense. They take all the old prices before the split and divide them to match the new share count, so the chart reads as one smooth, honest line instead of a cliff edge that never really existed. That rewritten version is called split adjusted data.
It matters most when you are comparing performance over years. A UK example: a British investor tracking a company like easyJet or Rolls Royce years after a split would want split adjusted figures, otherwise their return calculations would be wildly wrong, showing a loss where there was actually a gain.
For the Nigerian in London or Toronto calmly building a stock portfolio back home through a custodian account, this detail is not trivial. If you are comparing today's Dangote Sugar or Nigerian Breweries price to what it was five years ago, always check whether the historical prices you are looking at have been split adjusted. Otherwise your sense of how well or badly you did could be completely upside down.
A stock split 2 for 1 when it was ₦40. Unadjusted charts show it falling to ₦20. Split adjusted charts calmly rewrite the older price to ₦20 as well, so the line still looks like a gentle climb instead of a sudden drop.
Questions people ask
Does a stock split change how much my investment is worth?
No. A split only changes the number of shares and the price per share. If you had ₦100,000 worth of shares before a split, you still have ₦100,000 worth right after it, just spread across more shares at a lower price each.
Why do companies bother splitting their shares at all?
Usually to make the share price look more affordable and easier to trade in round lots, which can attract more everyday investors, though it does not change the underlying value of the business one bit.
How do I know if the data I am looking at is split adjusted?
Good financial data providers usually state this clearly, sometimes labelled as adjusted close or adjusted price. If a chart shows a sudden unexplained drop with no news attached, that is often a sign the data has not been split adjusted.
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