Market MakeHer Podcast 39. What is a Stock Split? (looking at the Nvidia stock split 👀)
Jun 7, 2024
Dive into the world of stock splits with a focus on Nvidia's latest announcement. Discover what a stock split actually means and the difference between forward and reverse splits. Gain insights on why companies choose to split shares, particularly for accessibility and liquidity. Learn about Nvidia's impressive 10-for-1 split and how it impacts share pricing. Plus, explore the fun math behind splits and the effects on dividends and buybacks. Perfect for anyone looking to enhance their investing knowledge!
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How Forward Splits Keep Value Same
- A 10-for-1 forward split gives every shareholder ten times the shares while dividing the price by ten, leaving market cap unchanged.
- Jess Inskip explains this preserves total value while lowering per-share price to increase accessibility.
Splits Aim To Increase Accessibility
- Splits increase accessibility and potentially retail demand by lowering the per-share price, though fractional shares already help with access.
- Jessie DeNuit and Jess Inskip note accessibility remains a key motive despite fractional-share availability varying by broker.
Check Investor Relations First
- Check a company's Investor Relations page for split FAQs, historical splits, and official guidance before the split date.
- Jess Inskip advises using Investor Relations to confirm how your brokerage will handle fractional shares and certificates.