There could be another reason behind Nvidia’s stock split

There could be another reason behind Nvidia’s stock split

Nvidia headquarters in Santa Clara, California, on Tuesday, Feb. 23, 2021.

David Paul Morris | Bloomberg | Getty Images

Nvidia announcing a 4-for-1 stock split on Friday could have some significant ramifications.

Just like with Apple a few years ago, could this stock split finally open the door for the company to to join the Dow Jones Industrial average?

Currently, UnitedHealth — which has a share price above $400 — has the greatest weighting in the Dow. That’s because the Dow is a price-weighted index, giving higher-priced stocks more influence.

At Nvidia’s current pre-split price, it wouldn’t be very feasible for it to join the Dow, since it would have a very disproportionate impact on the index. But at a post-split $150 price – the story is very different. At that level, it would be right in the middle of the pack in terms of its index weighting.

Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts