What happens to my GME options during a split? With a super volatile stock like GME, the split may create some interesting price action. Often, there's a lot of trading executed around splits, creating volatility both before and after the split itself. This additional 16% of growth could be attributed to many factors besides the split itself, though, including organic company growth.
Take it with a few grains of salt, however, since GME is in a peculiar position in the stock market.Īccording to Bank of America research reported by Reuters, stocks that split gain 25% on average in the following 12 months, compared with 9% growth in benchmark indexes. Though we can't say what this will bring for GME's stock, there's some precedent from historical stock split data. In short - pun intended - anything can happen to share prices in the stock market short-term. In a stock split, the issuing company doesn't raise any capital for its own use.
Note that a stock split isn't the same thing as a stock offering. The split also provides more financial flexibility for the company. Once the stock split occurs, the share price is lowered, making it more accessible to retail investors and company employees with stock compensation plans. In each case, on the official day of the split, the number of shares in circulation is multiplied by the split ratio and the value of the stock is then adjusted accordingly. Stock splits can come in any ratio - some common split ratios include 3-for-1, 5-for-1 and 20-for-1. So, what's a stock split?Ī stock split essentially makes the stock more accessible and flexible. Below, we lay out what this means for you as a shareholder. Stock splits occur for a variety of reasons and may increase the short-term volatility of the stock price and options market. If the stock split occurred around that price, the split-adjusted price would be roughly $36. GameStop was trading at roughly $145 Monday morning. Trading will continue at the split-adjusted price when the market opens on Friday, July 22. ET today and receive new shares Thursday. This means you can still buy shares until 4 p.m. The cutoff date to be a shareholder of record is market close on Monday, July 18. The new shares will be issued to shareholders of record at market close on Thursday, July 21. GameStop will complete its 4-for-1 stock split this week after a months-long process.
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