GameStop Plans 4-For-1 Split
The meme stock saga continues.
2 min
GameStop’s stock split is finally happening.
The company announced plans to split its stock four-for-one later this month, sending shares higher after the market closed on Wednesday. Shareholders of record at the close of business on July 18 will receive three additional shares for every share owned via a stock dividend. The additional shares will be distributed on July 21, and GameStop (ticker: GME) stock will begin trading on a split-adjusted basis on July 22.
GameStop stockholders in June voted in favour of expanding the company’s share authorisation to one billion from 300 million in order to facilitate a split. The company said in March that the higher authorisation would allow it to implement a split and “provide flexibility for future corporate needs.”
Shares of GameStop rose 5% to US$123.25 in after-hours trading even though stock splits don’t make a company more valuable, given that they are akin to cutting a pie into smaller slices. If GameStop split at its recent after-hours levels, it would trade at $30.81.
That is around the US$30 pre-split price target Wedbush analyst Michael Pachter assigns the stock, which he rates at Underperform. “Makes it more affordable for unsuspecting rubes who haven’t yet lost all of their money,” Pachter told Barron’s via email when asked about the split.
The stock has traded as high as $255.69 in the past 12 months, but it is still up significantly from its 2020 levels. Even the potential post-split number is well above where GameStop shares were trading before Chewy co-founder Ryan Cohen announced a stake and launched a campaign that kicked off the company’s meme-fueled run in January 2021. GameStop stock has fallen 20% in 2022, compared with a 19% drop for the S&P 500 index.
Cohen became the chairman of GameStop’s board a year ago. The company has added executives and employees with technology, e-commerce, and blockchain backgrounds to help turn things around as the business battles the shift to sales of videogames online rather than in stores.
Following the board and management shake-up, the company invested in fulfilment and customer-care efforts, as well as expanding its offerings to include more computer supplies and TVs. It is also launching a marketplace for nonfungible tokens. Experts, like Pachter, are sceptical such blockchain efforts will benefit the stock.
Reprinted by permission of Barron’s. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: July 7, 2022.
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Tech investor was one of the most outspoken supporters of Trump in Silicon Valley
2 min
President-elect Donald Trump named a Silicon Valley investor close to Elon Musk as the White House’s artificial intelligence and cryptocurrency policy chief, signaling the growing influence of tech leaders and loyalists in the new administration .
David Sacks , a former PayPal executive, will serve as the “White House A.I. & Crypto Czar,” Trump said on his social-media platform Truth Social.
“In this important role, David will guide policy for the Administration in Artificial Intelligence and Cryptocurrency, two areas critical to the future of American competitiveness,” he posted.
Musk and Vice President-elect JD Vance chimed in with congratulatory messages on X.
Sacks was one of the first vocal supporters of Trump in Silicon Valley, a region that typically leans Democratic. He hosted a fundraiser for Trump in San Francisco in June that raised more than $12 million for Trump’s campaign. Sacks often used his “All-In” podcast to broadcast his support for the Republican’s cause.
The fundraiser drew several cryptocurrency executives and tech investors. Some attendees were concerned that America could lose its competitiveness in emerging areas such as artificial intelligence because of overregulation.
Many tech leaders had hoped the next president would have a friendlier stance on cryptocurrencies, which had come under scrutiny during the Biden administration.
“What the crypto industry has been asking for more than anything else is a clear legal framework to operate under. If Trump wins, the industry will get this, and more innovation will happen in the U.S.,” Sacks posted on X in July.
The tech industry has also pressed for friendlier federal policies around AI and successfully lobbied to quash a California AI bill industry leaders said would kill innovation.
Sacks’ venture-capital firm, Craft Ventures, has invested in crypto and AI startups. Sacks himself has led investment rounds in many. He has previously invested in companies such as Slack, SpaceX, Uber and Facebook.
Sacks was the former chief operating officer of PayPal, whose founders included Musk and Peter Thiel . The group, called the “PayPal mafia,” has been front and center this election because of its financial muscle and influence in drumming up support for Trump.
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