What GameStop Investors Should Know About The Stock Split Plan

A video game retailer and popular "meme stock" is surging thanks to a new shareholder proposal.

What Happened: GameStop Corp GME announced in a 8K filing it will have shareholders votes on increasing the number of authorized shares.

Shareholders will vote to authorize the outstanding shares authorized from 300 million shares to 1 billion. 

The increase will allow the company to “implement a stock split of the company’s Class A common stock in the form of a stock dividend.”

The increased share count could be done to “provide flexibility for future corporate needs,” the filing said. 

GameStop also said it will ask shareholders to approve a new incentive plan to “support future compensatory equity issuances” that would replace the 2019 Incentive Plan now in place. 

A date has not been set for the company’s annual meeting. The 2021 event took place on June 9 and the 2020 event took place on June 12.

Related Link: GameStop Q4 Highlights: Earnings Plunge Year-Over-Year, Revenue Beats Street Estimate, NFT Marketplace Update

Why It’s Important: A potential stock split would follow a similar shareholder proposal put forth by Tesla Inc TSLA to its shareholders.

Amazon.com Inc AMZN and Alphabet Inc GOOGGOOGL also announced 20-to-1 stock splits earlier this year that have yet to take place.

Price Action: Investors are reacting positively to the news from GameStop and also taking other meme stocks higher in after-hours trading Thursday, according to Benzinga Pro. Many of the stocks have moved in sympathy to GameStop in the past.

• GameStop shares are up 17% to $195.
• Hycroft Mining Holding Corp HYMC shares are up 7% to $2.46.
• AMC Entertainment Holdings AMC shares are up 5% to $25.79.
• Koss Corp KOSS shares are up 4% to $9.50.
• Express Inc EXPR shares are up 1% to $3.60.
• Bed, Bath & Beyond BBBY shares are up 3% to $23.19.