The Nike stock split date has been set for Wednesday, Dec. 23, and through the deal, Nike Inc. (NYSE: NKE) will be providing investors with two shares of Nike stock for every one they already hold.
The stock split is payable to shareholders of record as of the close of business Dec. 9. Shares will begin trading at the post-split price on Dec. 24.
The Nike stock split will increase the amount of both Class A and Class B shares on the market. After the split, there will be 353 million Class A shares and 1.36 billion Class B shares on the market.
This marks the seventh time in Nike's history it has split shares. The last Nike stock split was in December 2012. All Nike stock splits to date have been 2-for-1.
With the split, Nike shares will become much more affordable to investors. A 2-for-1 stock split halves the price of shares. That means Nike shares will trade near $64.69 post-split, based on today's opening price of $129.37.
Yet all investors, whether they own Nike shares or not, should be interested in the Nike stock split...
What the Nike Stock Split Means for the Dow
When the price of Nike shares changes on Dec. 24, Nike's weighting in the price-weighted Dow Jones Industrial Average will be reduced.
That means gains and declines in the index will also likely be reduced...
The storied blue-chip benchmark is watched closely around the world. The 30 stocks that make up the Dow are carefully selected for their economic importance and influence. Nike was added to the Dow on Sept. 10, 2013.
As of Dec. 15, Nike had a roughly 4.7% weighting on the Dow, Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told Money Morning.
That makes Nike the sixth most impactful Dow component behind only Goldman Sachs Group Inc. (NYSE: GS), 3M Co. (NYSE: MMM), Boeing Co. (NYSE: BA), International Business Machines Corp. (NYSE: IBM), and Home Depot Inc. (NYSE: HD).
Nike's Dow weighting will drop to roughly 2.4% after the split, making it the 21st most impactful name on the index.
By this measure, the consumer discretionary sector's weighting would also dip to 16% from 18%.
Stock splits among the Dow 30 components have been scarce for the last several years.
Visa Inc. (NYSE: V) declared a 4-for-1 split in January that took effect in March. Prior to that was Coca-Cola Inc.'s (NYSE: KO) 2-for-1 split in 2012.
This has been a great year for Nike stock, with shares up nearly 35% year to date. In the last five years, Nike stock has climbed more than 195%, compared to a gain of 54% for the Dow during the same time.
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