Why Nvidia Stock Jumped Today
Nvidia (NASDAQ: NVDA) climbed 4.3% on Wednesday, following its 4-for-1 stock split on Tuesday.
Stock splits don't change the fundamental value of a business. A 4-for-1 split is in many ways like exchanging a $1 bill for four quarters. The total value is the same; it's just divided into more pieces.
Nevertheless, traders do tend to get excited about stock splits, and this can positively impact a stock's price leading up to the split. After the split occurs, however, traders often take the opportunity to book short-term profits. And many investors, who are now in possession of more shares, use it as a chance to sell part of their holdings and book some long-term profits.
Source Fool.com
