July 6 (Reuters) - GameStop Corp's board has
approved a four-for-one stock split that will make it more
affordable for investors to own shares of the video-game
retailer at the center of last year's "meme stock" trading
Shares of the company shot up 5.8% to $124.49 in extended
trading on Wednesday after the announcement.
Several major U.S. companies have opted for stock splits
over the past two years, including Apple, Tesla
A stock split makes shares more affordable for individual
investors by lowering the price without affecting the company's
Shares of GameStop skyrocketed more than 680% in 2021 thanks
to retail traders on social media platforms such as Reddit who
snapped up heavily shorted stocks in a bid to squeeze out hedge
funds betting against them.
"GameStop management knows that they have a 100% retail
shareholder base and so, they are catering to them," said
Wedbush Securities analyst Michael Pachter.
"It (the stock split) is also a distraction because the NFT
market is dead, and that was the last thing that they did that
tried to get people excited."
This year, the video-game retailer's shares have wound down
roughly 20% as the Ukraine crisis and fears of a global
recession clouded sentiment.
The company said in March it would seek shareholder approval
for the split which would increase its outstanding Class A
common shares to 1 billion from 300 million.
Under the split, shareholders will receive a stock dividend
of three additional shares of GameStop's Class A common stock
for each share held.
The dividend will be distributed after markets close on July
(Reporting by Chavi Mehta in Bengaluru; Editing by Devika