STORY: Shares of meme stock darling GameStop rose as much as 10% on Thursday after the video game retailer announced a four-for-one stock split in an effort to revive investor interest that has waned amid a market selloff.
The effort appeared to be working Thursday morning, when the GameStop was the most actively traded stock on retail trading platform FidelityInvestments.
The split comes at a time when GameStop shares have slumped 20% this year, mirroring a fall in other risky bets as fears of a recession loom.
Along with AMC Entertainment, GameStop was at the heart of a meme-stock trading phenomenon last year, when retail investors banded together on social media forums to punish hedge funds that had bet against the stocks.
Since then, retail investors have gravitated more toward broad equity ETFs and megacap tech stocks, having lost what one analyst told Reuters was "a considerable amount of money," adding that "they can't afford to lose more in occasional bets."
Shares of companies often rise after a stock-split announcement as it lowers the per share price, boosting liquidity and making it more accessible for individual investors.
Though some financial advisers warn that stock splits do not change a company's fundamentals.