On June 9, 2014 Apple (Symbol AAPL), makers of the iPhone, will be splitting their stock 7:1. That means that for every share of Apple stock that you own on or before June 2, 2014, you will now own 7 shares after the stock split on June 9, 2014.
Here’s an example:
If you owned one share of Apple……
Before stock split
Your 1 share of Apple would cost (be worth) $621
After the 7:1 Stock Split
1 share = 7 shares @ $88.71 per share
The value of your 7 shares is not more than the value of your one share, you just have more shares at a lower price and it is easier to buy more shares because they now cost $88.71 per share rather than $621 per share.
The reason companies split their shares is because they feel the price per share has gone too high for most buyers, so they split the shares to make it more affordable for buyers.
Sometimes after a stock split, shares have a “after split jump”, meaning they go up in price because more people are able to afford to buy them.