GameStop Corp. (GME) just announced a 4:1 split.
All after the stock exploded from a low of about $3.15 to a current price of $117.43. On the news, the GME stock is up another $10.46 in aftermarket to $127.89.
“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 stock will begin trading on a split-adjusted basis on July 22,” says Barron’s.
Unfortunately, the stock is still disconnected from its fundamentals.
“Shares remain at levels that are completely disconnected from the fundamentals of the business due to ongoing support from eager retail investors,” Wedbush analyst Michael Pachter said, as quoted by Barron’s. “Headwinds, combined with high levels of spending related to its NFT efforts and other cost centers, may trigger significant cash burn for much of the next year or longer, forcing the company to issue more equity.”
In its most recent quarter, the company posted a net loss of $157.9 million, or $2.08 a share, as compared to expectations for a loss of $1.46. However, sales did come in at $1.38 billion, which was ahead of estimates for $1.34 billion. The company also failed to provide an outlook.
