NVIDIA (Nasdaq: NVDA) hosted its GTC event this week. What used to be a more intimate gathering with NVIDIA proposing dozens of use cases for its graphics processors was widely compared to a “Taylor Swift-like atmosphere.” More than 11,000 people packed an arena as NVIDIA CEO Jensen Huang unveiled the company’s next-generation B200 AI chip.
So, with GTC happening the focus this week was squarely on NVIDIA’s product portfolio. Yet, there were a couple of pieces of split-related news that NVIDIA investors shouldn’t have missed.
1. Cramer Asks Jensen Huang About a Stock Split
Source: ojbyrne / Flickr
CNBC had an exclusive interview with Jim Cramer and Jensen Huang, and Cramer didn’t take long to ask the question on many investors’ minds: when is a stock split coming?
You can watch the interview here, or I’ll transcribe it below with bolding for emphasis:
Cramer: There were 150 people I saw this weekend who all told me, please tell |NVIDIA’s CEO| ‘thank you.’ They all also want something, that I know is pedestrian, and doesn’t add value. They all want a stock split. Why can’t you give it to us?”
Huang: Well, we’ll think about it. Today is not the day to announce it as you know.
Cramer: No, I know… Again I apologize
Huang: Yeah, we’ve done stock splits in the past. One of the things I really like about stock splits, by the way, is that it makes for the stock purchase for our employees – and others – |easier|. It’s a good thing. And we want to make sure we do a good job for our employees, they do such an incredible job for us.
In a recent article I published named ‘3 Reasons an NVIDIA Stock Split is Coming Soon,’ I highlighted how NVIDIA has focused on stock splits making shares more accessible not only to retail investors but also to their employees.
Clearly, this is on the front of Jensen Huang’s mind today. Everything in Jensen’s answer tracks with the timeline I laid out in ‘Here’s When NVIDIA Will LIkely Announce a Stock Split.’ GTC wouldn’t be the right time as it’s a product-focused event.
However, NVIDIA has an event coming for the investor community that’s perfect for voting on a stock split. That’s its Annual Meeting of Stakeholders. My bet is that NVIDIA will announce a stock split that’s been approved by its board in late May to early June, and the stock split will be approved in June by shareholders.
Huang’s answer to Cramer only confirms that the company sees value in stock splits, and likely won’t let shares continue trading at levels near $1,000 per share.
2. Chipotle’s Stock Split Is Cheered By Investors
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I believe that NVIDIA will soon announce a stock split that’s either 4:1 or 5:1. However, this week Chipotle (NYSE: CMG) announced a stock split that was pretty unconventional in its size.
Chipotle is splitting its shares at a 50:1 ratio! With company shares trading at about $2,882.04 at Friday’s close, they would trade at about $58 per share post-split. That’s a very dramatic split.
What was interesting about this split that should be on the radar of NVIDIA investors was the reaction to the stock split announcement. Chipotle closed on March 19th at $2,797.56. After the announcement, the next morning it opened at $2,935.72, which was a 5% jump in its value.
As we’ve discussed before, from an academic perspective stock splits don’t increase the value of a stock. However, the announcement of stock splits has led to jumps in share prices in recent years. With anticipation building for an NVIDIA share split, it’s likely the company’s stock would react similarly to what happened with Chipotle following an announcement.
Read More NVIDIA Stock News
- Here’s When NVIDIA Will LIkely Announce a Stock Split
- Is NVIDIA’s Stock Headed to $2,000 Per Share?
- ARK CEO Cathie Wood Calls NVIDIA A Massive Bubble
- Best Stock to Buy Now: NVIDIA vs. Super Micro Computer
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