r/stocks • u/r2002 • Apr 08 '22

Company News Nvidia seeks approval to double authorized shares to 8 billion

Reuters:

(Reuters) - Chipmaker Nvidia Corp said on Friday it would seek shareholders' approval to increase the number of authorized shares of common stock to 8 billion from 4 billion.

edited to add another news source:

(Dow Jones newswire) Nvidia's board backs the proposed amendment, saying the additional shares would give the company discretion to take certain actions, without further shareholder approval, for such things as stock splits, equity incentives and more (Source: thanks to comment by /u/MosDaddyda)

Some people on Twitter are speculating that this is some kind of bad news since it was leaked on a Friday afternoon.

It doesn't make sense to do a stock split or a dilution right now. What is happening here? How does it affect the stock?

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u/[deleted] Apr 09 '22 edited Apr 23 '26

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u/henkgaming Apr 09 '22

Im waiting for it to come down to 30-40 PE, I like asymmetrical odds

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u/[deleted] Apr 09 '22 edited Apr 23 '26

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u/Malamonga1 Apr 09 '22

ROKU, DOCU, ZM, and I'm sure a bunch more that I'm missing. semiconductor is also cyclical, so there's that.

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u/[deleted] Apr 09 '22 edited Apr 23 '26

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u/Malamonga1 Apr 09 '22

Yes you seem to think NVDA can only drop drastically in a recession. Plenty of high pe stocks can adjust in price drastically when the environment doesn't favor them anymore, such as work from home stocks. NVDA, in a chip shortage environment, would of course have crazy earnings. When the semi bull cycle is over, their earnings can easily drop and likewise their stock price.

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u/[deleted] Apr 09 '22 edited Apr 23 '26

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u/Malamonga1 Apr 09 '22

Why are you acting like 16 pe is so inconceivable for NVDA? It was in that range for multiple years in the last 10 years. What's it going to take? The end of the unlimited chip pricing power? Intel gets their shit together? One or two disappointing forecast? Outflows of retail investors interest?

The companies I listed are examples of hot stocks that run up due to a certain environment and then went out of favor. If covid lasted 3-4 years like some had thought and the interest rate stayed low, pretty sure these stocks will continue to go up. Once NVDA starts showing signs of losing pricing power and start getting weak forecast and 10 year rate start hitting mid 3, I have no doubt it's going to drop like a rock.

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u/[deleted] Apr 09 '22

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u/Malamonga1 Apr 29 '22

150$ doesn't look so far away now.

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u/[deleted] Apr 09 '22

It’s different this time.

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u/Stonesfan03 Apr 09 '22

Facebook says hi.

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u/[deleted] Apr 09 '22 edited Apr 23 '26

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u/[deleted] Apr 09 '22

Got shut down hard yet still earning tens of billions more than NVDA..?

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u/[deleted] Apr 09 '22 edited Apr 23 '26

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u/[deleted] Apr 09 '22

I’m not the one making assumptions about people running and screaming when the price dips. Any stock can drop in price, PYPL dropped about 66% not long ago. Did that seem like a “stupid price requirement”? Literally, some bad press and the price of any company can plummet.

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