We talked about Nvidia’s split it a little bit last week when they came out with their earnings report. They also mentioned that they were going to have a ten for one split in June. So, current shareholders of Nvidia, the share price has been hovering around $1,000 a share. So if you had one share of Nvidia after the split, you’re going to end up with ten and a share price of whatever, a 10th of whatever the share price is on that day.
But if it happened today, or if it happened when the share price is 1000, instead of having a 1001 share at $1,000, you’d have ten shares at 100 each, which is still just $1,000.
When it comes to dollar cost averaging if something like this happens, typically when a company splits, it’s a positive thing, but it’s really neutral at the time that it happens. But even Nvidia said that the reason they’re doing it is to make shares more affordable for investors, which it really doesn’t. Stocks work on percentages. So if you have Nvidia at a, it goes up to $1,100, that’s a 10% increase. It’s the same thing as $100 stock going up to $110.
We have to try to look through the price per share and really look at percentages and the value and, and those kind of things.
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