Investors who have fallen into the trap of the first fallacy believe Wal-Mart, Microsoft and many other large companies were once penny stocks that have appreciated to high dollar values. Many investors make this mistake because they are looking at the "adjusted stock price", which takes into account all stock splits. By taking a look at both Microsoft and Wal-Mart, you can see that the respective prices on their first days of trading were $28 and $25 even though the prices adjusted for splits is $0.09722 and $0.02444 (at time of writing). Rather than starting at a low market price, these companies actually started pretty high, continually rising until they needed to be split. (Click here for a spam that claims Microsoft and Wal-Mart started out as penny stocks.)
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