it's been a long time WSB. I figured I'd drop a DD post to help you all have some context around $NVDA's stock split that will go live on Monday & what has historically happened to Tech Co's after executing a stock split.
NOT FINANCIAL ADVICE.
TL;DR – The $NVDA stock split is BEARISH given the historical performance of tech co. stock splits. Scroll to the bottom for positions
Let's start by looking at a list of recent stock splits, how they performed over the next couple sessions:
I. $AAPL 4 for 1 stock split announced on 7/30/20 (w/ earnings), went active on 8/28/20:
- Performance after announcement of stock split to stock split actual date:
- Opened at $100.48/share on 7/31/20, closed at $122.11/share on 8/28/20 for a gain of +21.5%
- AFTER STOCK SPLIT GOES LIVE PERFORMANCE: reference $122.11/share closing price
- 3-day: +5.3%
- 6-day: -9.6%
- Got to as low as $107.7/share within 1-month for a drawdown of -11.8% after stock split was announced before bouncing
II. $AMZN 20 for 1 stock split announced 3/9/22, went active on 6/3/22:
- AFTER STOCK SPLIT GOES LIVE PERFORMANCE: reference on 6/3/22 of $122.35/share closing price
- 3-day: -1.0%
- 6-day: -15.3%
III. $TSLA 3 for 1 stock split announced on 8/5/22, went active on 8/24/22 at close:
- AFTER STOCK SPLIT GOES LIVE PERFORMANCE: reference on 8/24/22 of $297.10/share closing price
- 3-day: -4.1%
- 6-day: -6.7%
IV. $NVDA 4 for 1 stock split announced on 5/21/21, went active on 7/20/21 (a rare bullish stock split):
- AFTER STOCK SPLIT GOES LIVE PERFORMANCE: reference on 7/20/21 of $185.80/share closing price
- 3-day: +5.1%
- 6-day: +4.8%
- $NVDA actually was selling off prior to the stock split date here where it reached as high as $203.37/share before closing at the near-term bottom of $187.47/share (-7.8%) the day RIGHT before the stock split date (7/19/21)
There are many other examples like Tesla's 5 for 1 stock split on 8/28/20, $GOOG 20 for 1 stock split on 7/15/22, & others. I've compiled a database of tech company stock splits from $CSCO to $MSFT back to 1991 to obtain the following stats:
Average 3-day performance after a stock split: -0.8%
% of times negative 3-days: 52.0%
Average 6-day performance after a stock split: -3.4%
% of times negative 6-days: 72.0%
\*days measured as next 3/6 trading days, not calendar days*
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I like my odds here on a bearish play on $NVDA following the stock split on Monday.
POSITIONS: July 5 $1140P. If it gets to ~$1000 (or $100/share split adjusted), my plan is to buy the dip.
Happy tendie hunting you regards
Is the $NVDA Stock Split a Near Term Top? DEEP DD INTO STOCK SPLITS HERE
byu/IAMB4TMAN inwallstreetbets
Posted by IAMB4TMAN
25 Comments
I have a 960p 6/28 (gap fill area) so it will probably keep going up in a literal straight fkn line
So what you’re saying is, most tech stocks go down after a split except NVDA. Got it.
https://preview.redd.it/3cxo7g5ppe5d1.jpeg?width=1080&format=pjpg&auto=webp&s=e4ccb78c7159125213c277520ceed20f7b45c052
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[deleted]
inversing this for sure, calls it is
That’s it I’m selling NVDA and loading up on intel.
“If one puts an infinite number of monkeys in front of typewriters, and lets them clap away, there is a certainty that one of them will come out with an exact version of the ‘Iliad’. Upon examination, this may be less interesting a concept than it appears at first: Such probability is ridiculously low. But let us carry the reasoning one step beyond. Now that we have found that hero among monkeys, would any reader invest his life’s savings on a bet that the monkey would write the ‘Odyssey’ next?”
– Abraham Lincoln
My guess is it runs 3-5 days post split before a pull back to under $100(post-split)
Stock split or not, the question is if investors feel comfortable with 4tril valuation now.
U didnt cross reference your research fam, look at the overall market and NVDAs finanicals during the drop after stock splits years ago. Dnt be a 🏳️🌈🐻 and miss out on % going up. Of course bearish mondays are a thing but wait max a few days to a few weeks after split u will see your mistake 📈
Once again I will comment on $nvda, this stock ain’t going nowhere but up, why? Cause they are selling out of chips they haven’t even released yet let alone the next generation after Blackwell has been announced. Until it is reported that a slow down in sales is happening, it’s up from here.
RemindMe! 14 days
Splits tend to be sell the news events. No one was sitting on the sidelines waiting to make a major buy until the split. They would have just bought fewer shares before.
I’m just going to long hold my shares long term
Nicely done
So why don’t you just wait a week or 2 after split and go long instead of trying to time a top?
Have you considered it goes straight up and consolidates after your puts expire? guess you could always roll them while Hodlers get 🤑
People that bought $Amzn and $Goog after the split dips are up pretty nicely right now, don’t see why it wouldn’t be the same here. Or it just shoots straight to $200 because I have literally no idea what I’m talking about.
6 months after the splits you mentioned, where were these stocks? I know NVDA was way up in November 2021 then crashed back down in 2022. But it hit 300+ in Nov 2021 before backing down to 230s in Feb 2022. That’s a sizable gain in 6 months. What were these others – curious if you have that info. I expect NVDA to keep going higher until Jan 2025 when the Year to Year Q earnings growth won’t be 300% each Quarterly report.
Huge call after split?
People have not learned yet. Don’t bet against nvidia
That’s it. I’m buying calls then
Did you measure max drawdown after the split that would be an interesting one
Here’s another gaay bear building the wall of worry. Godspeed regards.
See you either at the Valhalla or Wendy’s