GameStop stock split: What does it mean for 'OG' meme stock investors?

July 21, 2022 06:31 AM PDT | By Rupam Roy
 GameStop stock split: What does it mean for 'OG' meme stock investors?
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Highlights:

  • GameStop is all set for a for-for-one stock split.
  • The split is expected to happen after the market closes on July 21.
  • GameStop announced on July 11, that it has launched its NFT marketplace.

One of the most popular meme stocks, GameStop Corporation (NYSE:GME), is looking to split its stock in a four-for-one manner. It would give the investors an additional three shares of GME stock for each share they own.

The four-for-one stock split is expected to happen after the closing bell on Thursday, July 21. The board approved the recent split on July 6.

Notably, this would be the second split for the video game retailer. In March 2007, GameStop had opted for a two-for-one split. 

What would it mean for the investors?

The stock split would increase its total share count to over 1 billion from its current shares of around 300 million. However, it would not necessarily affect its market cap or valuation.

The stock split of the GME stock could attract investors’ attention due to affordability. According to the company statement, the stock split would offer more "flexibility for future corporate needs".

Meanwhile, several analysts expect that the split action could fuel a short squeeze, bolstering gains in the stock. Over the past 30 days, the price of the GME stock returned 13.17 per cent.

However, some experts argued about the company's intention for a stock split as its financial results are declining to be in tandem with its stock price. In the first quarter of fiscal 2022, its net loss was US$ 157.9 million compared to a net loss of US$ 66.8 million in the year-ago quarter.

GameStop's recent developments:

GameStop appeared to gain traction after it had unveiled its plans to get involved in non-fungible tokens or NFTs at the end of the second quarter.

On July 11, GameStop announced the launch of its NFT marketplace that allows gamers, creators, and other community members to purchase, sell, or trade non-fungible tokens.


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Among its other recent developments, it appointed Diana Saadeh-Jajeh as its CFO, who served the same role on an interim basis in 2021 and held the role of Chief Accounting Officer.

Bottom line

The stock split news of the original meme stock follows technology behemoths like Apple Inc. (AAPL) and Tesla, Inc. (TSLA). Both the companies had their stock split in 2020. Alphabet Inc. (GOOGL) and Amazon.com, Inc. (AMZN) also enacted stock splits this year.

However, given the highly volatile condition in the global financial markets in recent days and other uncertainties that are dampening global sentiments, investors should exercise due diligence before spending on stocks.


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