Do I make money if my stock splits?

A stock split is a corporate action where a company increases the number of its outstanding shares by dividing each existing share into multiple shares. This process is often undertaken by companies to enhance the liquidity of their shares in the market.

By increasing the number of shares available for trading, a stock split can make the shares more accessible to a wider range of investors, thereby improving their liquidity. This can be beneficial for the company as it attracts more buyers and sellers to the market, leading to a more active trading environment.

Another motivation for companies to conduct stock splits is to make their share prices more attractive to investors. When a company's share price becomes too high, it can deter some investors who may not be able to afford to buy a single share. By splitting the stock, the company can reduce the per-share price, making it more accessible to a larger pool of investors.

However, it is important to note that a stock split does not add any real value to the company or to the shareholders' investments. The total dollar value of the shareholders' investments remains the same, as the increase in the number of shares is offset by a decrease in the per-share price.

Despite this, stock splits can still have a positive impact on a company's share price. In many cases, the announcement of a stock split can be seen as a positive sign by investors, as it indicates that the company's management is confident in its future growth prospects. This can lead to an increase in demand for the shares, pushing up their price.