GameStop stock shoots up 20% on news of a possible stock split

GameStop Corp (NYSE: GME) shares jumped 20% in extended trading after the gaming merchandise retailer said it was considering a stock split.

GameStop to increase number of outstanding shares

According to GameStop, it will seek shareholder approval to increase the number of its outstanding Class A shares by 700,000,000 at its annual meeting. The Texas-headquartered company wants to execute the stock split as a stock dividend, subject to board approval.

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It is yet to be known, however, if the entire increase in the number of shares will execute the stock split. As per the regulatory filing, GameStop might use some of it for other purposes, including a possible share sale.

The world’s largest video game retailer also expects this move to ensure flexibility for “future corporate needs”.

GameStop stock has been on the rise this month

The meme stock has been on fire this month, now up more than 150% over the past couple of weeks. Retail investors rushed back into GME after it reported better-than-expected revenue for its fiscal fourth quarter in mid-March.

Chairman Ryan Cohen also increased his stake by 100,000 shares last week that was also well-received by the individual investors. Cohen now owns 11.9% of GameStop Corporation.

Earlier this year, GameStop also said it will set up an NFT marketplace for videogames collectibles. Despite a sharp move up, the $12.72 billion company is still down roughly 20% from its high in late November 2021.