GME’s overall rating of 46 out of 100 suggests that the company performs better than 46% of all companies, despite being in the Specialty Retail sector.
GameStop Corp. (NYSE:GME) stock traded at $131.10 on Tuesday, April 26. That is a $4.85 or 3.57 percent decrease from its previous closing price, $135.95. The stock’s price ranges between $130.80 to $136.80 today.
Today’s activity is lower than usual. There have been 110,000.999 shares moved thus far, which is lower than the average of 6,529,615 shares.
GameStop announced its intention to divide its shares on April 8. According to GameStop, this split will make GameStop stock more accessible for retail investors.
The 2022 Incentive Plan of the company includes a stock-split program. The company’s proxy statement states that the plan was created to “enable future compensating stock issuances.” According to the report, GameStop must approve the proposal to retain GameStop’s top-quality management team.
If the proposal is approved by its board, 8 million additional shares of common stock can be made. Ryan Cohen, GameStop’s director, has asked shareholders to vote for the proposal.
Why do companies ever split stock?
Stock dilution may not be something a corporation shareholder wants to hear. However, when new shares are issued, shareholders’ ownership percentage decreases by diluting their float.
Even if the stock is to be increased in the future, the decreased voting power of shareholders might still be seen as a negative.
GameStop’s management stated last year that it would issue shares from time to time in an elegant manner. So how can this be done in a way that isn’t fraught with uncertainty and doubt for GameStop shareholders?
GameStop had the brilliant idea of allowing customers to vote on the stock splitting. The split will not affect GameStop’s core business. It is claimed that the firm was motivated primarily by a desire for greater liquidity.
Investors will undoubtedly be affected.
Stock splits are often better for investors than stock dilution. According to some data, stock splits and positive movements in the near term are often related events. Recent examples include Alphabet and Amazon, Tesla, Nvidia, and Apple, which saw their stock prices rise sharply in the short term. GameStop would likely notice the same thing.
Because of its high volatility, positive news about GameStop can significantly impact the stock’s share price. As a result, the stock split will likely benefit GameStop’s stock.
Ryan Cohen, a man with a unique understanding of GameStop’s shareholders, may have found a way to align the company’s management goals with those of GameStop shareholders through his Incentive Plan (the stock splitting).
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