GameStop Announces 4-to-1 Dividend Stock Split And Reddit Buzzes In Anticipation Of Tendies

GameStop ($GME), arguably the most beloved of all meme stocks, is undergoing a 4-for-1 stock split today, meaning that those currently holding one share will be hodling three more at the end of the day (although the value of each new share will be a fourth of the original share).

Sucks to suck.$GME #GME #GameStop #moonpoonsoon pic.twitter.com/KOcAc8LhLB

— pwnwtfbbq (@pwnwtfbbq) July 7, 2022

While GameStop has entered back into regular orbit following its famous trip to the moon in 2021, the stock remains closely watched by both hedge funds and retail investors on apps like Robinhood.

On Reddit’s /r/wallstreetbets financial memers and analysts had a lot of thoughts about the upcoming split. For the most part, lovers of GameStop seemed bullish on the possibilities.

Finally man! pic.twitter.com/99ICfJq2Jh

— moneypenny.loopring.eth (@MissmoneypennyU) July 6, 2022

But, as is often the case, /r/wallstreetbets served as a forum for financial education. The kind of stock split GameStop is undergoing is called a “dividend split,” meaning that three new shares are issued instead of each existing share splitting into four pieces.

What this essentially means is that it will be more difficult for those short-selling the stock (that is, betting against it or "shorting") to make money.

Please read this very carefully and draw your own conclusions: $GME #gamestop pic.twitter.com/EVlqnQz8QF

— King Diamond Hands 👑 💎🙌 (@ThatNeighborBoy) July 6, 2022

As the news spread rapidly across Reddit and other social media platforms like Twitter, many commentators online criticized the media for not covering that particular dimension of the stock split.

gm ☕Not one GameStop headline in the past 24 hrs mentioning the dividend at all, just a "bandwagon" stock split lol. They know 😏 pic.twitter.com/UzMfLf5Aj4

— ssddman 🏴‍☠️ (@0xssddman) July 7, 2022

It also puts the price of one share of GameStop stock into the reach of more Redditors. Other companies, including Amazon and Tesla, have done the same to attract retail investors. Pre-split, GameStop has cost around $130. Post-split, it’ll probably trade for $30 to $40, an investment people are much more willing to make.

While it’s unclear whether the stonk will go to the moon again, the news struck many investors as a spot of brightness in the middle of what is a rather dim and bearish economic landscape.