2 Reasons to Buy Stock Splits (And 1 Reason Not To)
Have you noticed that Apple's (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years?
Why isn't the stock price higher?
This is because Apple has repeatedly split its stock whenever the price ran up beyond a certain price. In a stock split, a company divides existing shares in order to lower the price per share. Imagine a pizza that has been cut into six slices. If you were to cut each slice in half to make 12 slices, the pizza itself wouldn't get any bigger; you'd just have two smaller slices for each original slice.
Source Fool.com