GME stock-split vote and short squeeze chatter push GameStop shares up 30%
Updated
GameStop (GME) stock is in play again this week, as chatter on message boards ahead of the company’s earnings, and a potential short squeeze, drove the meme stock up 30% Thursday after gaining nearly 30% Wednesday.
After closing Wednesday at $115 per share up 29.1% from Tuesday’s $89 per share closing price on over 10 million in trading volume, GameStop stock jumped to over $148 per share after the opening bell. GameStop stock trades on the NYSE under the ticker GME.
GameStop announced Monday it would release financial results for its fiscal first quarter on Wednesday 1 June, including a shareholder vote to increase its outstanding shares to 1 billion from the current 300 million, which will be used, in part, to pay dividends in the form of stock.
GameStop Corp. (NYSE GME) price chart
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Stock-split vote next week
On 31 March, the electronics retailer “announced its plan to request stockholder approval at the upcoming 2022 Annual Meeting of Stockholders for an increase in the number of authorized shares of Class A common stock from 300,000,000 to 1,000,000,000,” the company disclosed in a Form 8-K filing.
While the exact split ratio is to be determined, Gamestop added it plans to use some of the additional shares “to implement a stock split of the Company’s Class A common stock in the form of a stock dividend,” which it said would provided added flexibility.
“The Wall Street Bets crowd smelled blood in the water when news started making the rounds that short interest had grown to its highest level in nearly a year,” noted daily newsletter The Water Coolest, referring to the reddit forum r/WallStreetBets. “[T]he retail investors (and probably some hedge funds) couldn't get enough shares.”
Crypto product rollouts
Earlier this month, the retail investor army driving GameStop stock higher over the past year and a half claimed their largest victim, with hedge fund Melvin Capital, founded in 2014 by Gabriel Plotkin, shut down and said it would liquidate its accounts and refund the remaining funds to investors.
Reddit user Aus_pol said, “GME doing the GME thing.” Added user PrimaryAccording9162, “GME is one out of one.”
Also this week, GameStop officially launched s new digital asset wallet for gamers to store, send and receive cryptocurrency and non-fungible tokens (NFTs). Additionally, GameStop plans to launch a new NFT Marketplace this quarter.
GameStop is considered one of the leading so-called meme stocks, along with AMC Entertainment (AMC) and Bed Bath & Beyond (BBBY), driven by retail investors betting against hedge funds who shorted the stock amid Covid-related retail store closures.
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