Infamous meme-stock, GameStop (GME, $135), is looking to move to the next level after announcing plans for a four-for-one stock split. Shares jumped 15% once the news broke. The move is widely acknowledged as an attempt to revive retail interest that has waned amid a market selloff.
Owners of the OG meme-stock can now mark their calendars on July 21, when GameStop will offer its shareholders a three-stock dividend for every share they own after trading close. The split comes at a time when the company's shares have slumped 20% this year, mirroring a fall in other pandemic darlings as fears of a recession slammed risk assets.
GameStop was at the heart of Wall Street's meme trading phenomenon in early 2021. Along with AMC Entertainment Holdings (AMC, $14.48), retail investors banded together on social media forums to punish hedge funds that had bet against the stocks.
Why it matters
GameStop became the poster child for the meme stock craze that gripped markets post-pandemic. In 2022, that trade is no longer working. In short, today’s news can be seen as a desperate attempt by management to stall the decline. The split follows a similar move by tech giants like Google (GOOGL, $2375.66), Amazon (AMZN, $116.33) and Tesla (TSLA, $733.63). Historically, stock splits have prompted a positive response from shareholders and spurred share price rallies.
