GameStop's Stock Split: What You Need to Know

What is a Stock Split?

A stock split is a corporate action in which a company increases the number of outstanding shares while decreasing the price per share. This does not change the total value of the company or the stockholder's ownership percentage.

GameStop's Stock Split

On July 6, 2022, GameStop announced a 4-for-1 stock split in the form of a stock dividend. This means that for every share of GME stock owned, shareholders will receive three additional shares.

The stock dividend will be distributed to stockholders of record as of July 18, 2022. Trading will begin on a split-adjusted basis on July 22, 2022.

Tax Implications

Stock dividends are typically not taxable events. However, it's important to consult with a tax professional for specific advice.

Impact on Shareholders

The stock split will not change the total value of shareholders' investments. However, it may make the stock more affordable for some investors, potentially increasing liquidity and trading volume.

Potential Short Squeeze

Some analysts believe that the stock split could trigger a short squeeze. This is because short sellers who have borrowed shares to sell will need to deliver four shares for every one borrowed after the split.