GameStop seeks share break up amid renewed meme-stock hype

A GameStop retailer is pictured in the Manhattan neighborhood of metropolitan New York City, New York, U.S., January 29, 2021. REUTERS / Carlo Allegri / Archive Photography

 

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March 31 (Reuters) – Online gaming retailer GameStop Corp (GME.N) said on Thursday it may seek shareholder approval for an inventory break, in a bid to become the newest U.S. company to make it easier for retail buyers to buy its shares.

The transfer comes after the curiosity of retail investors for the so-called “meme stocks” has flared up over the past two weeks, which has led to a doubling of the value of GameStop’s stock to $166.58. An inventory shortage makes shares more inexpensive for individual buyers by reducing the value, without affecting the valuation of the company.

Some buyers are betting that the inventory shortage will increase the value of GameStop by attracting additional meme lovers. The agency’s shares jumped 19 percent in after-hours buying and selling on Thursday after the company introduced the transfer.

 

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Before now two years, Apple (AAPL.O), Nvidia (NVDA.O) and Tesla (TSLA.O) have split their shares, while Amazon (AMZN.O) and Google’s parent alphabet (GOOGL.O) have recently introduced upcoming share splits.

On Monday, Tesla Inc (TSLA.O) the market capitalization jumped by more than $80 billion after the electric car manufacturer said it may seek investor approval to once again improve the variety of its shares to allow for a future stock outage, without saying when that outage might occur. learn more

The restoration of this month’s stock market, driven by the hope of a decision in Russia’s battle with Ukraine, stimulated buyers’ craving for danger for food, making the circumstances of stock meme rallies very favorable.

Meme stocks are tightly shorted stocks that can be picked up by retail buyers on social media platforms corresponding to Reddit in an effort to squeeze hedge funds betting against them. The development took Wall Road by storm in January 2021 and has slowly run out of steam over the past 12 months.

GameStop plans to expand its variety of typical excellent Class A shares to 1 billion 300 million, it said in a statement. The company may even ask shareholders to vote on an incentive plan “to help future offsetting equity issues,” he added. (https://bit.ly/36Ztlqy )

The date and place of the annual meeting of the company’s shareholders have only been presented.

Billionaire Ryan Cohen, chairman of GameStop’s board of directors, revealed earlier this month that his finance company had bought 100,000 shares of the sports retailer. The acquisition brought Cohen’s full ownership of GameStop to 11.9%. learn more

Cohen’s efforts to show the turn of GameStop after joining the last 12 months of the company by investing in its stores and e-commerce business and bringing new expertise have only provided the main results.

Earlier this month, the company reported a $147.5 million shortfall for the three months ending in January, the largest holiday season loss in its history. The retailer has tried to win over players again who are now turning to online streaming or other retailers.

GameStop’s monetary stability could erode “relatively quickly,” except that the company is quickly becoming profitable, Wedbush analysts warned earlier this month.

 

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Reporting by Yuvraj Malik and Shariq Khan in Bengaluru, Svea Herbst-Bayliss in Boston and Noel Randewich in San Francisco; Editing by Greg Roumeliotis and Kenneth Maxwell

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