GameStop (NYSE: GME) shares surged Friday after it revealed plans to implement a stock split. The move would dramatically decrease the cost of one share, according to the company’s Securities and Exchange Commission filing. Shares rose over 10% Friday following the news.
The video game retailer will be asking for stockholder approval at the next shareholder meeting to boost the number of Class A common stock from 300,000,000 to 1,000,000,000 as a means of pursuing the stock split in the form of a stock dividend.
Additionally, the company also seeks approval for a new incentive plan which will back future compensatory equity issuances. If the new equity plan is approved, 8 million shares of its stock and any shares under the previous 2019 plan that expire, will be forfeited, canceled, terminated, or settled in cash after the new plan becomes effective.
“GameStop’s Board of Directors has approved both stockholder proposals, but the stock dividend will be contingent on final Board approval,” the company emphasized.
Nevertheless, it remains unclear how much of the boosted share count will be used for the stock split. Within a regulatory filing, GameStop hinted at the fact that part of the increase in shares would be used for other means at some point in time.