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GameStop Corp (NYSE: GME) shares jumped nearly 17% in an extended trading session on Thursday after the company announced it planned to implement a stock split.
The video game retailer said it will seek shareholder approval to increase the number of Class A common stock from 300 million to 1 billion to conduct a stock split in the form of a stock dividend.
Shares of the meme stock surged to $198.85 in after-hours trading after the announcement, which closed at $166.58 on Thursday.
Companies usually split shares to make their stock prices appear less expensive, which appeals to more investors.
However, GameStop did not disclose how much of the increased share count would be used for the stock split.
In an SEC filing, GameStop said the authorization would also be used to “provide flexibility for future corporate needs,” indicating that part of the extra number of shares could be used for other means, possibly selling more stock.
Shares of the company have jumped over 60% since mid-March as enthusiastic retail investors stood by their meme favorite.
Earlier this week, GameStop chairperson Ryan Cohen disclosed that his investment company bought 100,000 shares of the game retailer, bringing the activist investor’s ownership to 11.9%.
On Monday, Tesla Inc’s (NASDAQ: TSLA) market capitalization swelled by over $80 billion after the EV maker said it would seek investor approval to increase the number of shares for a future stock split.
Picture Credit: Forbes