(Bloomberg) -- GameStop Corp. shares jumped 10% in the opening minutes of Thursday’s session after announcing a four-for-one stock split in the form of a dividend, becoming one of the latest companies to do so as the practice has gained in popularity.
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Share splits had almost disappeared from U.S. stock markets before Apple Inc. and Tesla Inc. revived the practice after splitting their stocks in 2020. Amazon.com Inc. followed suit earlier this year. The moves helped trigger rallies in the companies’ shares as retail investors, who tend to favor stocks with lower price tags, flocked to them.
GameStop has been beleaguered by questions about its business model and direction. At a time when consumers prefer to purchase video games digitally in online stores, GameStop has experimented with pivots into esports and even crypto. The company became the poster child for so-called meme stocks, seeing volatile swings in the share price over the last year that have had little to do with its business fundamentals.
GameStop signaled plans to split the stock in March. At the time, the company said the split would “provide flexibility for future corporate needs.”
The dividend will be distributed after the close of trading on July 21, the company said Wednesday in a statement.
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