Here's What Happened After Nvidia's Last 3 Stock Splits (and What That Means for the Stock Today)
What is the purpose of a stock split, and how does it affect the per-share price of a company's stock?
The purpose of a stock split is to increase the number of shares outstanding while lowering the share price, making the stock more affordable and accessible to a broader range of investors. This can improve trading liquidity and attract more investors to the stock.
In a stock split, the number of outstanding shares increases, and the price per share decreases proportionally. For example, in a 2-for-1 stock split, the number of shares doubles, and the share price is halved. The market capitalization of the company remains unchanged, meaning the overall value of the company does not change due to the stock split.
How has Nvidia's stock historically performed immediately following its past stock splits?
Nvidia's stock has historically experienced a decline immediately following its past stock splits. After the 2007 split, Nvidia shares declined from their post-split high and spent some time trending lower. After the 2021 split, the shares followed a similar pattern but then picked up momentum about a year later. However, it's important to note that these movements were most likely driven by investors locking in profits or switching in or out of Nvidia for fundamental reasons, rather than the stock splits themselves providing direction for the stock.
On what date did Nvidia complete its recent 10-for-1 stock split?
Nvidia completed its recent 10-for-1 stock split on June 7.