The stock split finally happens — and its stock soars on the news.
The company announced plans to split its shares 4-for-1 later this month and boost shares after the market close on Wednesday. Shareholders of record after the close of business on July 18 will receive an additional three shares for each share held via a stock dividend. The additional shares will be distributed on July 21 and
(Ticker: GME) Shares are trading on a split-adjusted basis on July 22nd.
GameStop shareholders voted in June to expand the company’s share license from 300 million to 1 billion to facilitate a split. The company said in March that the higher permit would allow it to do a split and “provide flexibility for future business needs.”
GameStop’s shares are up 9% to $128 in premarket trading, though stock splits don’t add any value to a company since they’re akin to cutting a pie into smaller slices. If GameStop split at its recent after-hours levels, it would trade at $30.81.
That’s roughly the $30 pre-split price target that Wedbush analyst Michael Pachter is assigning to the stock, which he rates an underperform. “It makes it more affordable for unsuspecting suckers who haven’t lost all their money yet,” Pachter said Barrons via email when asked about the breakup.
The stock has traded as high as $255.69 over the past 12 months, but it’s still well above where it was in 2020. Even the potential post-split number is well above where GameStop stock has previously traded
(CHWY) co-founder Ryan Cohen announced an investment and launched a campaign that launched the company’s meme-powered run in January 2021
Cohen became CEO of GameStop a year ago. The company has hired executives and employees with technology, e-commerce and blockchain backgrounds to help turn things around as the company struggles with the shift to selling video games online rather than in stores.
After restructuring its board and management, the company invested in fulfillment and customer care efforts, expanding its offerings to include more computer accessories and televisions. It is also launching a marketplace for non-fungible tokens. Pundits like Pachter are skeptical that such blockchain efforts will benefit the stock.
Write to Connor Smith at email@example.com