GameStop Stock Ready To Split
It was a record-breaking year for the game industry in 2006, but even so, certain publishers haven't had great success on the stock exchange. However, the Nasdaq has been awfully kind to GameStop lately, as the mega-retailer's stock closed today at $53.04, which is only about $5 below its 52-week high of $58.42. In short, the share price is doing well.
But evidently, there is such a thing as "too well" in big business, because GameSpot has opted to generate a 2-for-1 stock split that will award each current shareholder two shares worth half as much as one share's value by the end of trading on February 20. All additional shares will be given out on March 16. So you know how you always envy your boss for somehow managing to select stocks that split, and then he annoys you even further by buying another yacht? Well, that's why this is a good thing for shareholders.
It's a high watermark for GameSpot, as this is the very first time their stock has split since going public on the Nasdaq in 2002. Currently, the company has around 76 million shares of common stock, which means that will soon double to 152 million as soon as the split occurs. And of course, analysts have responded well to the announcement.
"We continue to believe that the shares present an attractive opportunity for appreciation, particularly to investors with a time horizon of greater than one year, and advise investors to opportunistically add to positions," said Wedbush Morgan Securities' Michael Pachter in a note sent to investors.
We'll just assume that's a super-fancy way of saying that GameSpot shares are now a very "attractive" option for those in the market. So the stock splits, and everyone wins. Gotcha.
2/12/2007 Ben Dutka