One of today’s top trending names is Novo Nordisk (NYSE:NVO). The Danish pharmaceutical producer has seen its international profile grow this year due to the success of Ozempic. This Type 2 diabetes drug has also proven effective for assisting in weight loss. While Ozempic’s positive reception has led to an excellent year for NVO stock, shares are currently down 2% on some other news.
What’s going on? Well, Novo Nordisk is moving ahead with its planned two-for-one stock split, which took effect for B shares trading on the Nasdaq Copenhagen exchange today. As InvestorPlace contributor William White reports, shares trading on the New York Stock Exchange won’t undergo the split until Sept. 20. However, the fact that shares are struggling today raises some questions about what will happen when they do.
What’s Happening With NVO Stock?
News of NVO shares splitting on the Nasdaq Copenhagen exchange hasn’t helped NVO stock so far. As of this writing, shares are down 2% for the day after attempting to rally earlier. That said, the stock has been mostly rising all month and has overall performed very well.
Of course, the fact that NVO is down today may be concerning for some investors as the NYSE split draws near. But this isn’t the first time Novo Nordisk has split its stock — and investors who bought in before that are actually faring quite well. As Bloomberg reports:
“The shares have risen almost sevenfold since the company last split its stock in January 2014, driven by the company’s leadership in the global market for obesity drugs, which JPMorgan Chase & Co. analyst Richard Vosser projects to be worth $71 billion within a decade. And the majority of analysts see the strength continuing.”
With that in mind, it’s easy to see why the company would be opting for another stock split. Its foray into the obesity drug market has proven to be an excellent decision. Over the past one year, shares of NVO stock have risen more than 80%. That momentum isn’t likely to slow down as demand for Ozempic grows.
Stock splits are typically implemented by companies seeking to lower their share prices and make their stock more accessible to new investors. That strategy makes sense right now as Novo Nordisk prepares for more growth in the second half of 2023. While NVO may dip as the split approaches next week, it has a good chance of rebounding after that as new investors rush to buy in before the next surge.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.