We analyze a model in which a security’s value is composed of several distinct pieces and private information about those pieces is scattered among the investor population. Surprisingly, as information is scattered into smaller distinctly informative pieces, even if the acquisition cost per piece does not decrease, endogenous information acquisition activity in the economy can increase, alleviating information free-riding in financial markets. This relationship holds despite the naturally decreasing informativeness of each piece. Our findings offer a new explanation for empirical facts associated with the “diversification discount” puzzle and new insights on information markets with an information monopolist.