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GameStop seeks share split amid renewed meme-stock hype

Published 03/31/2022, 04:54 PM
Updated 03/31/2022, 07:15 PM
© Reuters. FILE PHOTO: A GameStop store is pictured in the Manhattan borough of New York City, New York, U.S., January 29, 2021. REUTERS/Carlo Allegri/File Photo

© Reuters. FILE PHOTO: A GameStop store is pictured in the Manhattan borough of New York City, New York, U.S., January 29, 2021. REUTERS/Carlo Allegri/File Photo

(Reuters) -Video game retailer GameStop Corp (NYSE:GME) said on Thursday it would seek shareholder approval for a stock split, aiming to become the latest U.S. company to make it easier for retail investors to own its shares.

The move comes after retail investor interest in so-called 'meme stocks' flared up in the last two weeks, leading to a doubling in GameStop's share price to $166.58. A stock split makes shares more affordable for individual investors by lowering the price, without affecting the company's valuation.

Some investors are betting that the stock split will boost the value of GameStop by attracting more meme-stock enthusiasts. The firm's shares jumped 19% in after-hours trading on Thursday after the company announced the move.

In the past two years, Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA) have split their shares, while Amazon (NASDAQ:AMZN) and Google-parent Alphabet (NASDAQ:GOOGL) have recently announced upcoming share splits.

On Monday, Tesla Inc's market capitalisation jumped by more than $80 billion after the electric car maker said it would seek investor approval to once again increase the number of its shares to enable a future stock split, without saying when that split might occur.

This month's stock market recovery, driven by hopes of a resolution in Russia's conflict with Ukraine, has boosted the investors' risk appetite, making conditions for meme-stock rallies more favorable.

Meme stocks are heavily shorted shares that are snapped up by retail investors on social media platforms such as Reddit with the aim of squeezing out hedge funds betting against them. The trend took Wall Street by storm in January 2021 and slowly fizzled over the course of the year.

GameStop plans to increase its number of outstanding Class A common shares to 1 billion from 300 million, it said in a filing. The company will also ask shareholders to vote on a incentive plan "to support future compensatory equity issuances", it added. (https://

The date and location of the company's annual shareholders meeting have not yet been announced.

Billionaire Ryan Cohen, who is the chairman of GameStop's board, disclosed earlier this month that his investment company purchased 100,000 shares of the game retailer. The purchase took Cohen's total ownership of GameStop to 11.9%.

Cohen's effort to turn GameStop around after he joined the company last year by investing in its stores and e-commerce business and bringing in new talent have yet to produce major results.

© Reuters. FILE PHOTO: A GameStop store is pictured in the Manhattan borough of New York City, New York, U.S., January 29, 2021. REUTERS/Carlo Allegri/File Photo

The company earlier this month reported a net loss of $147.5 million for the three months ending January, the first holiday-season loss in its history. The retailer has been trying to win back gamers who now turn to online streaming or other outlets.

GameStop's cash balance may erode "relatively quickly" unless the company becomes profitable soon, Wedbush analysts warned earlier this month.

Latest comments

LFG!
So, the mEmE rEtAiL iNtErEsT triggered a volume of 129m shares between March 18th and yesterday, that's around 15 billion USD (!!) of trading volume? Let's say 500,000 retail investors bought in those two weeks,this would correlate to each and everyone buying for 31,000 USD in that time frame, on AVERAGE. REALLY? That's not even closely realistic. So, here is what actually happened: From November 2021 until March 18th, short sellers used several methods to drive down the price: Shorting the stock via ETFs and the option chain. This was used by short sellers to the fullest extent possible, until 1. one of the main ETFs used for shorting (XRT) was added to the NYSE threshold list with a short interest of >500% and 2. ETF rebalancing took place beginning of this week, robbing short sellers from one of their main methods. Suddenly, cost to borrow GME skyrockets from 0.8% to 28% and shorters are forced to buy shares back in the market. THIS created the jump.
And yes... their short positions are THAT big, billions worth of GME, hidden in ETFs and the option chain and other derivative instruments. If you are interested to understand all of this and are tired of reading about made up stories that are not even closely realistic, you can educate yourself with great analysis that has been made public on places like superstonk. Just google it.
You can check the data here yourself if you don't believe me: GME price and volume: https://de.tradingview.com/chart/XxUSe2l0/?symbol=NYSE%3AGME NYSE Threshold List: https://www.nyse.com/regulation/threshold-securities Cost to Borrow and Utilization of GME borrows: https://app.ortex.com/s/NYSE/GME/short-interest
All well said brother...
Another hoax on GME stock splite lol
Another hoax on GME stock splite lol
RIP dumbass
C U later kenny
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