NVIDIA had become one of the most successful companies in recent years thanks to its artificial intelligence moves. So much so that we have seen share prices rise in recent years. A few days ago, it surpassed $3 trillion in market value, briefly surpassing Apple and becoming the second most valuable company. The company’s shares are trading at $1,191 at the time of writing.

The tech giant, in a statement last month On June 7, today it’s 10 to 1 stock split announced that he would do so. The split will take effect at the close of the stock market today. The new shares will start trading on June 10. So what does stock split mean? What does it mean for the investor? Let’s see.

What is the NVIDIA stock split?

NVIDA’s stock split, which begins today, will allow users to receive additional shares for the shares they own. Good 9 shares for 1 NVIDIA share will be distributed And division took place will be.

Let’s explain by giving an example. Suppose you own $1,200 worth of NVIDIA stock and participate in the split this way. As a result of the division 10 NVIDIA shares worth $120 each you will have. The total value will still be $1200.

In other words, the value of the share will not change in any way. Investors will still own NVIDIA stock of the same value. So there is nothing to worry about.

Why did NVIDIA decide to split its shares? What consequences will investors face?

NVIDIA’s decision to implement a stock split is a step for both its employees and investors. In its first quarter earnings release, the company announced it would sell shares to its investors and employees. to make it more accessible He stated that he did this for We will see over time how this will affect the situation in general, but especially can attract small investors It is possible to say.

We’ve seen such moves before from other tech giants. Giants like Amazon and Apple have implemented stock splits in recent years. But these were usually splits such as 2 for 1 or 3 for 1. For this reason, NVIDIA’s 10 to 1 split application is notable.

The company will receive shares from its investors through the demerger at more affordable levels It allows him to think he is. This also applies to the low share price. make more investments offers and attracts small investors. It also has the potential to increase liquidity by allowing more frequent trading. As for how the price will be affected, experts have stated that companies that undergo stock splits can generally experience an increase in the first year. Of course it is not possible to predict what things will look like in the longer term.

NVIDIA’s stock split increases the number of shares of the company outstanding It does not affect its value. So its value will remain the same. For example, it currently has a value of 2.93 trillion. This will continue. The market value is calculated by multiplying the total number of shares by the value of a single share.