Consider Nvidia — they are splitting their stock 4:1 through a stock dividend. What was preventing someone from buying a share before ex dividend, holding it past the record date and selling, only to receive 3 new shares on the payout date? Why wouldn’t instead the price fall to counteract this? It seems like an easy way to make 75%. Instead Nvidia traded higher in this time? What am I missing?
That's not how splits (or dividends) work. If you own one share of stock worth $100 and it does a 4-1 split, you will (eventually) have 4 shares worth $25 each. Anyone who buys stock before the split is effective gets the $100 shares; anyone who buys shares after the split is effective gets $25 shares. There's no arbitrage opportunity.
Same for a dividend. If your $100 stock pays a $5 dividend, after you the dividend is effective you will have stock that's worth $95 and (eventually) $5 in cash. Again, there's no arbitrage opportunity. Either you get $100 stock and a dividend or $95 and no dividend. (There are timing differences between when the dividend is announced, effective, and paid, but that's not germane to the arbitrage question).
Stock dividends have the same dilutive effect on the original shares, so a "3 share" dividend is the same as a 4-1 split from the shareholder's perspective. The original share represents a fourth of the ownership that it did, so they are worth 1/4 of their original value, with the other 3/4 "given" back to you in the form of additional shares.
The difference between a stock dividend and a stock split is that with a stock dividend, the _company pays cash for the new shares. So instead of just splitting the ownership into smaller pieces, the company uses cash to provide additional pieces to its owners. One benefit of this is that owners will benefit from future growth, versus a cash dividend where the cash is completely out the door.
If just before the split was announced you had 10 shares and the price was $100 per share, then your investment was worth $1,000.
If shortly after the split was announced it started going up and at the key moment of the split it was worth $120 per share your investment would be worth $1,200.
Just after the key moment you would now have 40 shares and they would be worth $30 per share. You investment would be worth $1,200. the number of shares is multiplied by 4 and the price is divided by 4. The splitting event doesn't change the worth of any investors investment.
This is covered in the NVIDIA 2021 Stock Split Frequently Asked Questions:
What is a four-for-one stock split in the form of a stock dividend?
A stock dividend is a common way to implement a stock split. On the distribution date, holders of the company’s common stock will receive three shares for each share they hold as of the record date. The result will be a stock split where what was once one share is now four shares, and the trading price will be divided by four.
Splitting doesn't make investors rich. It is the movement because of the announcement, and the belief that it is a good thing that increases the value of the investment. Buying between the announcement and the key moment allows some current investors to cash out, or people who buy quickly to make a profit during the short time they own the shares.