Here's everything you need to know about Nvidia's upcoming stock split and why it's more important to markets than the run-of-the-mill stock split. FULL VIDEO TRANSCRIPT: You’ll be forgiven if you have Nvidia envy. The stock is on a tear - crossing $1200 a share at its peak. Feels too rich for your blood? There might be a better chance to get in on the action…because Nvidia is getting a 10-for-1 stock split. To be clear, every existing share will be split into 10 new shares. If this is your first stock split, think of it like a pizza pie: The size of a total pizza and the price for that pie are the same no matter how you slice it. But the more you slice the pie - the smaller the pieces - and the more people get to eat. So let’s get back to Nvidia… Let’s say an investor holds one share of Nvidia at $1200 before the split. After the split, that investor holds 10 shares at $120 a piece - do the math - that still equals the original $1200. So why split a stock? One reason is Liquidity. That’s a fancy way of saying flexibility. The higher a stock price, the less flexibility buyers and sellers have. If you’re still a person who uses cash a lot, you’ll know what I mean. Which bill gets used the most - the $1 bill or the $50 bill? You guessed it, the smaller currency because there is more flexibility and less risk. When a stock is in the stratosphere like Nvidia - a stock split makes it more manageable to handle.And that can pay off for shareholders. Stocks that split usually do better than the benchmark S&P 500. According to BofA Global Research, companies that announce a stock split rally an average of 25 percent over the following year - that’s more than double the 11.9 percent gain for the overall S&P 500 in the same period. An uber-rich stock price can also keep a stock out of mutual funds, ETFs, and high-profile indices like the venerable Dow Jones Industrial Average. Since the Dow is price-weighted index, a $1200 stock like Nvidia would have too much sway. But, a post-split, $120 stock - could pave the way for Nvidia not only to keep on influencing the AI world, but also have greater influence on the investing world. Subscribe | http://t.st/TheStreetTV Earn. Live. Invest. | https://www.thestreet.com/ TheStreet Pro | https://pro.thestreet.com/ #nvidia #investing #stocks