Yet last December, a stock that I own split 5 for 4 "in lieu of dividend". The share price stayed the same. I believe that's a 25% instant gain. Had I sold after the split at the then market price, I'd been 25% ahead from the day before. [Considering today's price, I sometimes wonder if I should have sold it]. This may be a different situation from a split. A company can issue a stock dividend, which gives the shareholder additional shares. The value of this comes out of the retained earnings of the company, and the price per share does *not* get reduced on the markets. But, the future earnings per share *is* diluted because of the additional shares.I don't particularly like stock dividends in lieu of cah dividends because of the earnings dilution, but if the company can grow earnings fast enough, then it might be OK.