Split in Apex is very similar to Java string split.
the pattern you pass to the split method is not a direct match, its a REGEX pattern. so the pipe symbol | is considered as a Regex input and it splits the string into individual characters.
You can use the below code to get thru this
newString.split('\\|')
here's some other discussions around the same topic
http://stackoverflow.com/questions/6978901/splitting-a-string-using
and a blog post from Lacey on the same topic