Video game retailer GameStop Corp said on Thursday it would seek shareholder approval for a stock split, aiming to become the latest U.S. company to make it easier for retail investors to own its shares.
market capitalisation jumped by more than $80 billion after the electric car maker said it would seek investor approval to once again increase the number of its shares to enable a future stock split, without saying when that split might occur.This month's stock market recovery, driven by hopes of a resolution in Russia's conflict with Ukraine, has boosted the investors' risk appetite, making conditions for meme-stock rallies more favorable.
Meme stocks are heavily shorted shares that are snapped up by retail investors on social media platforms such as Reddit with the aim of squeezing out hedge funds betting against them. The trend took Wall Street by storm in January 2021 and slowly fizzled over the course of the year. GameStop plans to increase its number of outstanding Class A common shares to 1 billion from 300 million, it said in a filing. The company will also ask shareholders to vote on a incentive plan "to support future compensatory equity issuances", it added. Billionaire Ryan Cohen, who is the chairman of GameStop's board, disclosed earlier this month that his investment company purchased 100,000 shares of the game retailer.
The company earlier this month reported a net loss of $147.5 million for the three months ending January, the first holiday-season loss in its history. The retailer has been trying to win back gamers who now turn to online streaming or other outlets. GameStop's cash balance may erode "relatively quickly" unless the company becomes profitable soon, Wedbush analysts warned earlier this month.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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