By Having Implemented Stock Split, NVidia Simply Followed Footsteps of Tesla and Expects a Similar Outcome
Nvidia (NVDA) stock has more than tripled over the past year alone, to trade at just over $125.20 as of the market close on Wednesday, June 12, taking into account its recent share split.
Nvidia (NVDA) stock has more than tripled over the past year alone, to trade at just over $125.20 as of the market close on Wednesday, June 12, taking into account its recent share split. Splits are an apparent, yet effective mechanism to attract small check investors into a popular stock investing. Thus, Tesla (TSLA) stock has split twice during its trading history. The first was a five-for-one exchange on August 31, 2020. Two years later, on August 25, 2022, the company implemented a three-for-one split.
To solve a similar accessibility/affordability problem, Nvidia executed a 10-for-1 stock split (was effective on June 10), which increased the number of shares in circulation tenfold, in order to organically reduce the price per share by 90%. As a result, investors can now buy one share in Nvidia for much less, which further boosted its performance.
Some Wall Street analysts think the stock split will send Nvidia shares higher in the short term because it attracts a broader investor base, but it's important to remember that it hasn't changed the fundamental value of the company.
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