By Dhirendra Tripathi
Investing.com – GameStop (NYSE:GME) stock rose 11% Friday after the company said it plans to seek shareholder approval for a stock split.
Some traders are betting that the stock split will boost the value of GameStop shares by attracting more meme-stock aficionados.
The gaming retailer will request at its upcoming annual meeting that shareholders approve a proposal to increase the number of Class A shares to 1 billion from 300 million, according to a filing. The move comes amidst a revival in interest among retail investors for so-called 'meme stocks' after a lull of a few months.
A stock split makes the shares more accessible to individual investors by lowering the price, without affecting the company's valuation.
The company said the split will “provide flexibility for future corporate needs.” It’s unclear when GameStop will release its definitive proxy statement. The company hasn’t announced when and where it will hold its annual meeting, though last year’s meeting took place in June.
Earlier this week, Tesla (NASDAQ:TSLA) disclosed its plans for its second split in less than two years which sent its market cap soaring by more than $80 billion in a single session.
GameStop is the original meme stock that the retail traders took fancy to during the pandemic as thousands of them, closeted at home during lockdowns, coordinated trades over social platforms like Reddit. It almost seemed like a battle between Reddit followers ‘WallStreetBets’ on one hand and the big institutional guys on the other. The stock rose 4,000% in 2021.