Nike Inc. on Thursday announced a two-for-one stock split, the sixth in its history, in a move that will make it easier for retail investors to buy the company's stock.
The Washington County athletic footwear and apparel company (NYSE: NKE) said shareholders of record on Dec. 10 will get two shares for every one they own, effective Dec. 24. The stock split is applicable to both the company's Class B common stock and the powerful Class A shares, the majority of which are held by Nike co-founder and Chairman Phil Knight.
Nike shares will begin trading at a split-adjusted price on Dec. 26. At that point, the company's outstanding Class A shares will increase to 178 million while Class B shares grow to 720 million.
Unless the company's share price increased by $10 in the next few weeks, the latest stock split will end Nike's pattern of splitting shares when the price surpasses $100. Nike shares closed Thursday at $90.83.
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The stock split announced Thursday is Nike's first since 2007, when the share price surpassed $106.
Companies, especially those in consumer products, commonly issue stock splits once their share price hits a high-dollar threshold like $100. Doing so cuts the price in half, making it easier for non-institutional investors to buy into the company.
The stock split was made possible in September, when Nike shareholders voted to issue as many as 750,000 new shares. At the time, CFO Don Blair said that prior to the vote, Nike didn't have the capacity — or enough unissued shares — to conduct a split.
The company also said it would pay a post-split quarterly cash dividend of 21 cents per share, payable on Dec. 26. The company said the payout represents a 17 percent increase over the last split-adjusted quarterly rate of 18 cents per share.
"Nike has a consistent track record of delivering value to our shareholders," CEO Mark Parker said in a news release. "Over the last 11 years the company has returned over $14 billion to shareholders through dividend payments and share repurchases. Today’s increase, together with the four-year, $8 billion share repurchase program announced in September, reflects our commitment to delivering value for our shareholders and the ongoing confidence we have in our strategy to generate long-term profitable growth and strong cash flows. I’ve never been more confident and excited about our future growth opportunities."
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