GameStop Corp. (NYSE:GME) reported on July 6 that its Board of Directors had authorized and declared a four-for-one stock dividend on the company’s Class-A stock. For each Class A common stock owned at that time, shareholders of record as of the close of business on July 18, 2022, will get a dividend of three extra shares of the Company’s Class A common stock. On July 21, 2022, following the conclusion of business, the stock dividend will be paid. On July 22, 2022, trading will start on a stock split-adjusted basis. After-hours trading on Thursday saw a decline in GameStop Corp. shares after the business disclosed that its chief financial officer had been sacked amid reports of layoffs.
GameStop (GME) shares dropped by over 5% during the extended session. Stephen Totilo, a reporter for Axios, reported a “major layoff” of GameStop employees and the resignation of Chief Financial Officer Mike Recupero, which were both announced in an internal email. The CEO Matt Furlong’s message, which pledged to “adjust headcount across different company departments,” was later obtained by CNBC and made public. In a late-afternoon press release on Thursday, GameStop announced that Recupero had lost his position and that Chief Accounting Officer Diana Jajeh would take over. He would be “entitled to certain remuneration, privileges, and benefits connected to termination without cause,” the business stated in the SEC filing.
Recupero, an executive from Amazon, was appointed more than a year ago as GameStop’s chief financial officer at the same time that Furlong was named the company’s CEO. According to her LinkedIn page, the employee arrived from Juul Labs in 2020, and before GameStop recruited Recupero, she served as interim CFO. Emails submitted to GameStop representatives requesting confirmation of the layoffs—which were not mentioned in the news announcement or the SEC filing—were not immediately responded to.
Following the company’s announcement of a four-for-one stock split, GameStop shares increased by 15.1% on Thursday, marking their largest one-day rise since May 25. The stock has dropped 8.9 % this year, outpacing the 19.3% decrease of the S&P 500 SPX. Before Apple Inc. and Tesla Inc. divided their stocks in 2020, share splits had all but vanished from American stock markets. This year, Amazon.com Inc. did the same. As retail investors flocked to the companies’ shares—who often favor stocks with smaller price tags—the movements helped spark rallies in the shares of the corporations.
There have been many concerns raised concerning GameStop’s business model and direction. GameStop has experimented with pivots into esports and even cryptocurrency at a time when consumers prefer to buy video games digitally from internet retailers. The company became the face of so-called meme stocks after experiencing erratic share price swings over the previous year that had little to do with the company’s fundamental operations. In March, GameStop gave notice that it would split the stock. The corporation said at the time that the division would “offer flexibility for future corporate demands.”
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GameStop Corp. is an American video game, game gear, and consumer electronics retailer. The company has its headquarters in Grapevine, Texas, a suburb of Dallas, and is the biggest seller of video games globally. As of January 29, 2022, the firm has 4,573 locations under the GameStop, ThinkGeek, EB Games, EB Games Australia, Micromania-Zing, and Zing Pop Culture brands, with 3,018 of those being in the U.S., 907 in Europe, 417 in Australia, and 231 in Canada.
GameStop owns and runs the video game magazine Game Informer in addition to its retail outlets. The business is currently number 521 on the Fortune 500. Due to a short squeeze that members of the online forum r/wallstreetbets engineered in 2021, the company’s stock price soared. As a result of the volatility of its stock price and the GameStop short squeeze, the firm attracted heavy media attention in January and February 2021.
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