Tuesday, June 18, 2024

Charles Payne: Nvidia’s stock split is a ‘form of manipulation’

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Although market-favorite Nvidia now costs a lot less to add to your portfolio, FOX Business’ Charles Payne warned against the “deliberate manipulation of the American public.”

“All these stock splits are a form of manipulation,” the “Making Money” host said on “Varney & Co.” Tuesday, before taking out a poster to show his math.

“If 940×10, [then] 94×100 is the same. So that’s pre-stock split, right? If people waited for the stock split for the stock to get cheap and affordable, they paid 121… The bottom line is: Wall Street understands this.”

On Monday, tech and A.I.-heavy Nvidia officially rolled out a 10-for-1 stock split, cashing in on the artificial intelligence boom it has been driving and giving investors a hefty nugget.

PELOSI NVIDIA STOCK BET PAYING OFF BIG, TRACKERS INDICATE

Nvidia shares have risen over 231,485% since its IPO in January 1999, and the split announcement comes as first quarter revenue of $26 billion, a 262% rise from the same period a year ago, beat estimates of $24.6 billion, as tracked by LSEG. The company also delivered a higher-than-expected second quarter revenue forecast of $28 billion compared to a $26 billion estimate.

FOX Business’ Charles Payne breaks down the math on Nvidias stock split. (Fox News)

Just after Tuesday’s opening bell, Nvidia was trading around $121.09 per share. Payne called its recent investors “suckers.”

“Any time a high profile name is going to split, a lot of non-investors know about it. They hear about it particularly not with social media,” he pointed out. “Wall Street knows they’re going to buy it after the split. They see this 120, these are the suckers. Why pay 29% more after the split than you could have bought the day they announced the split?”

“It’s a deliberate manipulation of the American public,” Payne added.

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Nvidia is considered the poster child for A.I., leading other rivals, including Meta and Google, under the direction of CEO Jensen-Huang, who is also the company’s largest individual shareholder, owning nearly 4% of company shares, as tracked by Thomson Reuters.

However, stock splits are in vogue this year as companies with high-priced shares roll out these divides, rewarding current investors and enticing new ones.

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FOX Business’ Suzanne O’Halloran contributed to this report.

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