A Meme Returns?
GameStop was one of the meme stocks of 2021 and is back on the radar of investors as the company announced a 4-for-1 split of its stock, which will take place on July 21 after trading closes.
Considering GameStop’s current share price of $140, the stock split may surprise some investors.
Stock split the new hot trend
There have been several high-profile companies engaging in stock splits this year. Amazon had a 20-for-1 stock split on June 3, Shopify followed up with a 10-for-1 split at the end of June, and Alphabet, the parent company of Google, had a 20-to-1 stock split on July 15.
Next on the list is GameStop. The share price of GameStop is nowhere near the four-digit price tag that Alphabet and Amazon had before their split, but it is still looking to shave away some of its shares.
On March 31, the video game retailer announced it would split its stock, and the company later confirmed a 4-to-1 stock split. As of Monday, July 18, all GameStop shareholders will receive three additional shares for every one share they own on the day of the stock split.
Is this enough for me to buy?
There have been a lot of stock split headlines this year that have captured the attention of investors. Do not be fooled by the hype – it does not indicate that a company is worth investing in.
You can’t judge a company’s long-term trajectory based solely on its stock split announcement. A stock split can result in a lot of shares in your account, but you shouldn’t let that blind you.
The shares of GameStop will trade on a split-adjusted basis on July 22. After the stock split, you’ll be able to buy shares for around $40 per share if the stock price was $140 before. Buying shares of GameStop after the split might make sense for your portfolio if you didn’t have the opportunity to do so before the split.