Investors are experiencing another exciting week. Tomorrow, GameStop shareholders will vote on some important proposals that may mean a GME stock split in the near future. Amazon will also enact its own stock split one day later. For investors, the AMZN stock split means an opportunity to purchase shares of the tech behemoth at a lower price tag.
Both of these news items are important. But investors need to know that they are two distinctly different events with different implications.
Let’s take a closer look at this week’s stock split news.
AMZN Stock Split vs. GME Stock Split News
Amazon and GameStop are two out of seven notable companies planning to split their stocks in the coming months. The list also includes some of the tech sector’s biggest names, such as Tesla (NASDAQ:TSLA) and Shopify (NYSE:SHOP).
These companies experienced significant growth in the 2021 bull market. They have also realized that splitting their stocks will make them more accessible to retail investors moving forward. For aspiring investors, the AMZN stock split represents a unique buying opportunity in particular.
Shareholders have already voted on and approved the AMZN stock split. The 20-for-1 split means that every one share of AMZN will be divided into 20 shares. So, investors will own more shares after the split, but the value of their holdings will remain unchanged. However, the split will likely trigger a trading frenzy as more investors scramble to buy in at the lower share price.
On the other hand, the upcoming GameStop vote is still in its proposal stage. Tomorrow is not an actual split of the stock, but a shareholder meeting where investors will vote on whether to allow for an authorized share count increase. According to GameStop’s 2022 Proxy Statement, the increase will allow the company “to implement a stock split of our
common stock […] and provide flexibility for future corporate needs.”
While not definite, there is no reason to believe shareholders will shoot down this proposal. After all, investors know that when Tesla enacted a split in August 2020, its stock value more than doubled the following year. Some experts see the potential split as Chairman Ryan Cohen aligning the needs of both investors and management.
What to Expect
Investors can likely expect this GameStop proposal to pass, in part because a potential GME stock split could mean future gains. Back in 2021, GME caught Wall Street’s attention due to its committed investor base. It’s highly unlikely the meme stock crowd will abandon shares; groups like Reddit’s r/WallStreetBets have triggered trading frenzies before and they can do it again. If investors vote in favor of the proposal and the company later enacts a split, it won’t take long for shares to climb.
This week’s events are different, but they are both positive growth catalysts. The AMZN stock split is poised to rock markets on Friday. GME stock may soon do the same if its proposal passes tomorrow.
On the date of publication, Samuel O’Brient did not hold (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.