Video game retailer GameStop Corp (NYSE: NYSE:GME) is trading adjusted for a stock split Friday. Here’s what that means for investors.
What Happened: GameStop announced the approval of a four-for-one stock split in early July. The approval by the company’s Board of Directors came after an April filing disclosed the plan for a stock split.
With the stock split taking effect, shareholders of the company received a dividend of three additional shares of common stock for each share they held prior to the stock split.
Shareholders of GameStop now have four shares for each share they owned prior to the split.
As a result, the share price of GameStop has been adjusted.
GameStop shares closed at $153.47 on Thursday, making the split adjusted closing price $38.36.
GameStop last split shares on March 19, 2007, with a 2-for-1 stock split. Shares closed at nearly the same price the day of the split as they did the previous day.
Related Link: GameStop Q1 Earnings: Revenue Beat, EPS Miss, NFT Marketplace Update And More
Why It’s Important: The stock split by GameStop comes after the company reported first quarter financial results that saw revenue beat Street estimates and earnings per share come in shy of estimates.
The company’s NFT marketplace has been a potential catalyst for Gamestop and saw early strength, taking only two days to pass the sales volume of the Coinbase Global (NASDAQ: NASDAQ:COIN) NFT marketplace, which launched months ago.
Stock splits have been popular in 2022 for large technology companies, with Alphabet (NASDAQ:GOOGL) Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) and Amazon.com Inc (NASDAQ: NASDAQ:AMZN) both completing recent splits.
Alphabet and Amazon both completed 20-for-1 stock split, significantly lowering the new share price on an adjusted basis. Both stocks had share prices that were in the four digit range, trading for over $1,000 each.
The split doesn’t change the valuation of the companies, but makes shares cheaper for investors to accumulate more whole shares and also makes the underlying options for the stocks cheaper.
Tesla Inc (NASDAQ: TSLA) shareholders will vote on a stock split in August for a potential 3-for-1 split.
GME Price Action: GameStop shares were trading down 4.23% to $36.83 on Friday, down from the split adjusted starting price of $38.36.
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