Microchip Technology (MCHP) - Get Microchip Technology Incorporated (MCHP) Report said Wednesday it will execute a two-for-one stock split in the coming months, sending shares of the semiconductor products and solutions group higher in early trading.
Microchip Technology said the split, which will affect shareholders of record on October 4, will "increase trading liquidity and to place the stock in a more attractive trading range for retail investors." The adjusted number of shares outstanding, as well as the adjust share price, will take effect on October 13, the company said.
Microchip Technology shares were marked 1% higher i following news of the split to at $149.60 each, a move that would extend the stock's year-to-date gain to around 9%.
Microchip's move follows a series of high-profile stock splits over the past year, including a four-for-one change unveiled by chipmaker Nvidia (NVDA) - Get NVIDIA Corporation Report in May and Apple's (AAPL) - Get Apple Inc. (AAPL) Report four-for-one split in September of 2020.
Tesla also unveiled a five-for-one split plan in August of last year, while General Electric (GE) - Get General Electric Company (GE) Report shares reduced from 8 to 1 on August 2 following reverse split plans revealed in the spring.
Earlier this month, Microchip posted stronger-than-expected results for its fiscal first quarter, which ended on June 30, including Street-beating sales of $1.57 billion and non-GAAP profits of $1.98 per share.
The semiconductor products and solutions group also boosted its current quarter sales forecast to between $1.616 and $1.679 billion, and sees adjusted earnings in the range of $2.05 to $2.17 per share.
"Business conditions remained exceptionally strong through the June quarter with record bookings and backlog for product to be shipped over multiple quarters," said CEO Ganesh Moorthy. "Demand outpaced the capacity improvements we implemented during the June quarter resulting in our unsupported backlog continuing to climb and our lead times stretching out."
"We expect to update our long-term business model later this year," Moorthy added.