What to expect from GameStop stock split
Retail investor darling GameStop has announced a four-to-one stock split to make it more affordable for investors to own shares.
The retailer of course needs no introduction, after being at the center of last year’s ‘meme stock’ trading frenzy.
Following the likes of Apple ($AAPL), Tesla ($TSLA) and even Amazon ($AMZN), GameStop is just the latest U.S. company to jump on the stock split bandwagon. So what do you need to know ahead of this event?
What is a stock split?
A stock split is when a company divides the existing shares of its stock into multiple new shares.
Does a stock split change the value of my positions?
Irrespective of the split (2:1 or 3:1), the total value of investor stock holdings will remain the same. What will change is the number of shares you own. For example, a four-to-one stock split with 100 shares at $4/share (total value $400) becomes 400 shares at $1/share (total value $400).
What if I own fractional shares?
All Stake traders with fractional holdings in $GME will also receive their respective split.
Earlier this year, GameStop had revealed its intention to do a stock split which it announced on July 6th after receiving board approval. Under the split, shareholders will receive a stock dividend of three additional shares of GameStop’s Class A common stock for each share held. Concurrently, the price per share of $GME will divide by 4 (so 100 shares at $4/share become 400 shares at $1/share). Below are the expected timings:
Record date – July 18, 2022 – all those holding GME will be entitled to receive additional shares due to the stock split.
Split Date – July 21 2022 – shareholders are due to split at 4-to-1 after the close of business on this date
What if I sell between the record date and split date?
If you choose to sell your positions you will sell at the pre-split price on that trading day, and your share split entitlement will be passed onto the new buyer.
What if I buy between the record date and split date?
Similarly, if you purchase shares between this date, you will do so at the pre-split price and will receive your share split entitlement on the Ex-Date.
How will this work with my Stake account?
We are working with our broker partner to ensure that all Stake accounts will be showing the correct stock split at the time of Ex-Date. However, due to the volume of accounts holding GME positions, you may experience a slight delay in live price and stock number at the market open.