Nvidia Corp., the graphics-chipmaker, saw its shares jump on Friday after the company said it would split its shares 4-for-1, in the form of a stock dividend, in an effort to make them more accessible to investors and employees.
Nvidia said in a statement on Friday that the split is subject to shareholder approval at the company’s annual meeting on June 3. The move, if approved, would increase the common stock to 4 billion shares. Currently, Santa Clara, California-based Nvidia has about 622.4 million shares outstanding, valuing the company at $363.8 billion, based on Thursday’s closing share price of $584.50. As trading got underway in New York on Friday, the shares jumped 3.1%. The stock has gained 12% so far this year.
If shareholders approve the plan, on June 21, according to Bloomberg, “each Nvidia stockholder of record will receive a dividend of three additional shares of common stock for every share held, to be distributed after the close of trading on July 19. Trading is expected to begin on a stock split-adjusted basis on July 20.”
Nvidia will be reporting quarterly earnings next week.
Baird analyst Tristan Gerra initiated coverage of Nvidia with an outperform rating and $800 price target, earlier this month.
“Nvidia is poised to dominate [artificial intelligence] computing, the most transformational technology of our era,” he wrote in a commentary, according to MSN.
“Nvidia’s data-center revenue has grown to nearly 30% of Intel’s platform revenue in just a few years,” the analyst said.
The barriers to entry into Nvidia’s businesses are “the highest and longest-lasting within the semiconductor industry,” Gerra said.
