Shareholders approve NVIDIA stock split. Here’s what happens next
Along with the release of its first quarter results, NVIDIA (NASDAQ: NVDA) revealed its intention to divide its shares four to one, with the aim of making its shares “more accessible to investors and employees”. The move was conditional on obtaining shareholder approval at the chipmaker’s 2021 annual meeting of shareholders, which took place on Thursday, June 3, as it required an increase in the number of authorized common shares. from 2 billion to 4 billion.
The votes have been counted and in a regulatory filing submitted yesterday after the market closed, NVIDIA announced that “our shareholders have approved an amendment … to increase the number of authorized common shares.” Here’s what happens next.
The stock split will be payable in the form of a stock dividend. Each shareholder of record on June 21 will receive three additional shares for each share held. The shares will be distributed after the market closes on July 19 and the newly split shares will begin trading when the market opens on Tuesday July 20.
Existing shareholders will not have to do anything to receive the additional shares, which will be deposited directly into their brokerage accounts once the share split takes place. It is important to note that investors should not necessarily expect new stocks to appear in their account immediately after market close on July 19. As internal processes differ from brokerage to brokerage, it can take up to several days for new stocks to appear in investors’ accounts.
Finally, investors should remember that a stock split does not change the value of the underlying business, but simply splits it into a large number of shares of ownership. As an example, NVIDIA shares recently traded at around $ 700. This means that instead of having one share worth $ 700, shareholders would own four shares worth $ 175 each.
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