What a Stock Split Is, Why Companies Do It, and How It Works, With an Example
What Is a Stock Split?
When Nvidia’s (NVDA) stock price soared past $1,200 in 2024, the global chip giant made a change that might puzzle some novice investors: they split their stock 10-for-one, making their stock cheaper. This decision, far from being unique to Nvidia, is typical of firms with highflying stocks that carry out stock splits so their shares are more affordable to a broader range of investors, particularly retail investors who might be deterred by high share prices. Announcing the split, Nvidia said the company wished “to make stock ownership more accessible to employees and investors.”
A stock split is when a company divides its stock into multiple shares, effectively lowering the price of each share without…
