In conjunction with its first-quarter earnings release, NVIDIA (NVDA 3.65%) revealed plans for a four-for-one stock split, with the intention of making its shares "more accessible to investors and employees." The move was conditional on obtaining shareholder approval at the chipmaker's 2021 annual stockholders meeting, which took place on Thursday, June 3, as it required an increase in the number of authorized shares of common stock from 2 billion to 4 billion.
The votes have been tallied, and in a regulatory filing submitted after the market close yesterday, NVIDIA announced that "our stockholders approved an amendment ... to increase the number of authorized shares of common stock." Here's what happens next.
The NVIDIA GeForce RTX 30 series of processors. Image source: NVIDIA.
The stock split will be payable in the form of a stock dividend. Each shareholder of record as of June 21 will receive an additional three shares of stock for every share held. The shares will be distributed after the market close on July 19, and the newly split shares will begin trading when the market opens on Tuesday, July 20.
Existing shareholders won't have to do anything to receive the additional shares, which will be deposited directly into their brokerage accounts once the stock split takes effect. It's important to note that investors shouldn't necessarily expect the new shares to appear in their account immediately after the market close on July 19. As internal processes differ from brokerage to brokerage, it may take as many as several days for the new shares to show up in investor accounts.
Finally, investors should remember that a stock split does nothing to change the value of the underlying business, but merely divides it into a great number of ownership portions. As an example, NVIDIA shares have lately been trading for roughly $700. This means instead of having one share worth $700, shareholders would own four shares, each worth $175.
