Am I getting free money from Apple?
Apple is doing a 4-1 stock split in August. What is a stock or share split? What does that mean?
Simple. If you own 100 shares of Apple, you will now own 400 shares instead. Did you just get free shares in Apple and 4x your investment value? Sorry to crush your apples (pardon the pun!), but unfortunately, no.
If you have a $20 bill in your pocket, essentially you have cut it into 4 parts. You now have 4 pieces of that original bill, but they still add up to only $20. Nothing has changed economically.
Why do companies do this then? At the time of writing, Apple was trading at about $424. After the split, all else constant, they will start trading at about $106 per share. At $424 a share, the "high price" might "appear" expensive to some investors and therefore "unaffordable" so companies do this to encourage more investors to trade the stock.
If you've been reading my articles for a while now, you will know that PRICE is not VALUATION. A high priced stock might present excellent value, and vice versa.
Find a great company, at a decent enough valuation, and just add to your personal collection.
Enjoy the search!