There have been two stock splits for GameStop stock (symbol: GME). The most recent stock split for GameStop took place on July 22nd, 2022.
GME decided to split its shares early this year and released an official statement announcing the split of shares into 3-for-1 on July 22, 2022. The decision was sealed on June 2, 2022. The term for the 4-for-1 stock split ended with the implication of the new one. However, the investors could purchase a day before the implementation of the new stock split.
The announcement of the stock split affected Gamestop Inc. in a way that their scheduled projects were frozen till the new stock split was brought into action.
GME Stock Split History
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What Does GME Stock Split Imply?
The stock split increases the number of shares, but because the prices are fixed, this can reduce the cost of the shares. For example, when you divide a particular food among more people, each person will get minimum shares, whereas if the number of people is reduced, every person will get plentiful.
GME announced a 3-for-1 stock split which means each person will be able to hold three shares. Earlier, the stock split was in a ratio of 4 claims per person. With the current ratio, the shareholders own shares whose prices are higher than the earlier ones.
How to Calculate the Number of Shares?
One can calculate the count of shares that they possess as a shareholder of GME through the following formula:
The new amount of shares held= Shares previously owned x 3
Why did GME Split its Stocks?
Generally, firms split their stocks with the intention of making their shares affordable for investors. This increases the liquidity and viscosity of the business of the company.
There are times when investors are willing to buy stocks in a particular firm, but they are unable to afford the prices of the stocks. In such a scenario, a stock split is the best incentive for these investors to participate in the business of the firm.
There might be some other reasons when speaking of the GME split, but the firm has not revealed any specific rationale for the split. Hence one can interpret that this split was actually a business strategy to boost the performance of the firm.
Effects on GME Options
Stock split affects your GME option the same way as it does to the stock. For example, under the 4-for-one split, if you hold a call for a $200 strike price, it will turn into four $50 strikes. Simply put, the strike is divided into four parts. In this case scenario, one can strategize their steps in a better way.
FAQs
How many times did GameStop split?
GME has witnessed a single stock split event in the past.
What is the prediction for GME stock?
Two of the economists have put forth their forecast regarding GME split for the next 12 months with a median target of 16.00 and the high target of 27.00. A median prediction suggests a -36.6 decrease compared to the previous split.
When did GameStop share split?
The official statement was released on July 6, 2022, and the split was applied on July 18, 2022.
