Why Did Nvidia Execute a 4-for-1 Stock Split in July 2021?
On July 20, 2021, Nvidia completed a 4-for-1 stock split. In a stock split, a company decides to increase the number of its outstanding shares on the market according to a precise ratio. In other words, every share of the stock “splits” into a certain number of pieces.
After a stock split, existing shareholders still own the stock, but their number of shares is multiplied. For example, in a 2-for-1 stock split, every share pre-split would become two shares post-split. The value of the said shares wouldn’t increase because the price divides according to the ratio of the split.