Nvidia stock price falls to $120! Here’s why NVDA is down by 90% from Friday’s close
The ownership rights of shareholders and shareholder equity remain unchanged following the stock split.
A big fall in Nvidia’s stock price is expected when the US stock market opens on Monday! Nvidia’s share price is quoting around 120 dollars before the market opens on June 10. On June 7, the Nasdaq-listed NVDA shares closed at $1200.89. This means Nvidia’s stock price has fallen roughly 90% since Friday’s close.
However, the shareholders and investors need not have to worry once Nvidia’s stock starts trading on Monday. The fact is trading of Nvidia’s stock will commence on a split-adjusted basis at market open on Monday, June 10, 2024.
Nvidia announced a stock split last month, making each share of the company more affordable for investors. A stock split results in an increase in the number of shares of the company without any change in the shareholder equity and diluting current shareholders’ ownership interests.
For example, if you buy 100 shares of a firm that trades at $100 per share and the company announces a two-for-one stock split, you will own 200 shares at $50 per share instantly. If the company pays a dividend, your dividends per share will decrease proportionally.
Last week, NVIDIA was trading at around $1200 and went for a ten-for-one stock split. Each record holder of common stock as of the close of the market on Thursday, June 6, 2024, received nine additional shares of common stock, which were distributed after the close of the market on Friday, June 7, 2024.
Trading is to commence on a split-adjusted basis at market open on Monday, June 10, 2024. If Nvidia shares were trading at $1,200 before the split, an investor holding one share before the split would hold 10 shares priced at $120 each after the split. So, do not get confused if the Nvidia stock price falls to $120 after the market opens on June 10.
Further, NVIDIA is increasing its quarterly cash dividend by 150% from $0.04 per share to $0.10 per share of common stock. The increased dividend is equivalent to $0.01 per share on a post-split basis and will be paid on Friday, June 28, 2024, to all shareholders of record on Tuesday, June 11, 2024.
NVIDIA’s share price is up by 200% over the last 12 months while in 2024 YTD, the stock has rallied by 135%. With a market capitalization of $2.97 trillion, Nvidia is closing in on Apple, which is ahead with $3.01 trillion valuation. Microsoft holds the top spot with an impressive $3.15 trillion market cap.