- Nvidia share price rallies to a new high of US$761.60
- The largest chipmaker in the US by market cap shares rose while many of its competitors fell in Monday's market drop, indicating investors view the semiconductor giant as first in class.
- Nvidia stock split will be applied on the 20th of July 2021
- One of the main products of Nvidia is their line of graphic cards which are highly important for gaming and crypto-mining, two very big industries in recent years.
NVIDIA Corporation (NASDAQ:NVDA) announced a stock split that will go into effect on July 20. Other companies, such as Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) have seen their shares do well following stock splits last year. NVIDIA's shares are expensive, but on the other hand, the company is quickly growing and has potential for more in the coming years. For long-term investors, NVIDIA could be a solid investment, although waiting for a correction to get a more favorable entry price could pay off.
The announced stock split will go into effect on July 20. On that day, NVIDIA's shares are split at a 4-1 rate, which will make the share count grow to ~2.5 billion on a fully diluted basis. Shares should then trade for a little around $200, all else equal.
Every shareholder will have four times the number of shares, but those shares prices will be split by the ratio of four. Below is an example of how the split will be reflected if you are holding NVDA.OQ in your CFI account:
Account holding a position Buy 100 NVDA.OQ at $700 open price. After the split is applied the account will have Buy 400 NVDA.OQ at $175 the number of shares increased by the factor of 4 and the price decrease by the same factor.
The reduction in the per-share price can sometimes have a short-term impact on the stock price due to the company's shares seeming more accessible.
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The content present in this article reflects the opinions and views of the author and does not necessarily reflect the position of CFI. The material published on this blog is provided for informational purposes only and should not be considered as investment advice. The Company is not responsible for the decisions and choices of the investor who has full and free will to make decisions that they see appropriate upon the investor’s sole discretion.