GameStop shares are rising after the video game retailer announced it will attempt its first stock split in 15 years
By MICHELLE CHAPMAN AP Business Writer
Apr 1, 2022 1:54 p.m
• 3 minutes reading time
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GameStop’s shares rose on Friday after the video game retailer announced it was attempting its first stock split in 15 years.
Grapevine, Texas, said in a regulatory filing late Thursday that it plans to increase its share count from 300 million to 1 billion so it can conduct a stock split in the form of a dividend. It plans to seek shareholder approval at its upcoming annual general meeting.
A stock split would change the price per share but not the total value of those holdings. The maneuver can boost a company’s stock price, at least temporarily, and it did on Friday. GameStop’s shares were up 8% at the opening bell.
JPMorgan Friday that while financial theory says otherwise, stock splits are “an additional tool to boost stock prices,” while not the new buyback.
GameStop’s announcement comes just days after electric vehicle maker Tesla announced its second stock split in less than two years. Additionally, Alphabet, Google’s parent company, announced a 1:20 split in February. Amazon said this month it would make an equal-ratio split.
Big tech companies have performed stock splits after big gains in their stock prices, which can open the door for retail investors who don’t have the financial clout to buy stocks that go into the four-figure range.
However, a single share of Google, Tesla, or Alphabet costs anywhere from $1,000 to $3,300. And shares of Tesla, Alphabet, and Apple are up between 30% and 60% over the past 12 months.
GameStop’s stock is down 13% over the same period and can be had for less than $200 a share.
But GameStop Corp. became a meme darling early last year when hundreds of thousands of smaller investors suddenly started buying its shares, sending its price skyrocketing to heights that shocked Wall Street. The stock went from $39 to $347 in just a week beforehand.
All of the company’s moves are attracting significant interest from individual investors, particularly after Chewy co-founder Ryan Cohen took a large stake in the company and now sits on its board. Investors have pinned their hopes on Cohen to push the traditional retailer in an online direction.
GameStop’s shares rose $13.18 to $179.76 on market open.