GameStop Announces Stock Split. What Happened to Amazon and Google After They Split Shares.
GameStop’s stock split will take effect this month.
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GameStop
was flying on Thursday, but this time it was a stock split—and not a meme-driven frenzy—sending shares in the videogame retailer higher.
The company has announced plans for a four-for-one stock split later this month, which will see shareholders of record as of July 18 receive three additional shares on July 21 for each share they own.
The news late Wednesday has sent GameStop (ticker: GME) stock up 7% in U.S. premarket trading on Thursday. While a stock split doesn’t make a company intrinsically more valuable, it has benefits, including making the shares more affordable to retail investors—a class of traders that have put GameStop on a wild ride since early 2021.
GameStop is only the latest company to head for a stock split, following Shopify
(SHOP) and tech giant Amazon
(AMZN) in June, with internet powerhouse and Google parent Alphabet
(GOOGL) lined up for next week.
How shares in these companies performed following the news and execution of their respective stock splits could indicate where GameStop is going next, at least in the short term.
Amazon ’s 20-for-one split should have seen its shares open at $122 when it took effect on June 6, but the stock opened higher than that and gained 2% on the day to close near $125.
That’s about as good as it got for Amazon post-split; the shares have yet to reclaim that level amid the tech stock carnage that has ensued amid interest-rate hikes and recession fears. Amazon stock closed at $114 on Wednesday.
E-commerce software group Shopify had a similar experience. Shopify investors approved a 10-for-one split on June 7 which took effect June 28.
The news on June 7 pushed the shares up almost 6%, but the company’s luck was less good when the split actually took effect; the shares lost 6% between June 27 and June 28.
The next major company to split its stock will be Alphabet . The tech giant announced plans to split shares 20-for-one following earnings in February, and the stock jumped 7% the next morning. Google’s stock split is set to take effect on July 15.
Write to Jack Denton at [email protected]
