Significant purchases of GameStop (NYSE:GME) stock are good news for bullish investors. Combine the positive sentiment insider purchases breed with stock split news, and GME stockholders could be in for rapid price gains.
Those insider purchases happened several weeks ago, but they remain very relevant today. On March 22, Ryan Cohen paid $10.2 million for 100,000 GME shares. Cohen is a Chairman at GameStop as well as the former CEO of Chewy (NYSE:CHWY). Cohen’s stake in GameStop now sits at 11.9%. Importantly, his last purchase of GameStop preceded its massive ascent from a relatively unknown gaming stock to something much bigger. That occurred in December 2020 when GameStop shares were worth approximately one-tenth of their current value.
But Cohen’s March 22 purchase wasn’t the only recent insider buying of note. GameStop director Larry Cheng purchased 4,000 shares of GME stock, valued at $383,355, a day before Cohen, on March 21.
The fact that GME stock prices have risen in the three weeks since indicates shares may be entering another period in which they trend upward. When those insiders made their respective purchases, shares were trading near $95. They are currently trading near $150.
On top of that, GameStop has also announced plans for a stock split. That potential stock split is contingent upon shareholder approval at the annual shareholder meeting. That meeting will likely take place in June based on past years’ meetings. The important thing to note is that stock splits are usually a positive for prices. Further, big-name firms, including Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG, NASDAQ:GOOGL) have announced similar plans. That means GameStop will be gaining exposure and headlines as the three firms move toward their respective splits.
GME stock is a much more volatile investment than either of those two tech giants, but that’s the appeal as the gains could come rapidly. Those insider purchases and a stock split make it likely to move in a positive direction.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.