GameStop (GME -4.95%) continued to outpace the broader market indices Wednesday, with shares up 4.9% as of 11:07 a.m. ET. At that point in the session, the Dow Jones Industrial Average and the S&P 500 were both up less than 1%.
The video game retailer continues to benefit from meme stock traders pushing its stock higher ahead of its 4-for-1 stock split Thursday. Many maintain the action could trigger a short squeeze; the stock has now risen by 20% over the past month.
GameStop initially announced its intention to split its shares back in March, and it was earlier this month that it formally announced the ratio of the split. The belief that a squeeze could be set off by the split is in part based on GameStop saying that the new shares would be distributed as a dividend, though that's simply accounting language, and doesn't mean the event will have any additional costs for short sellers.
Even so, the slow and steady rise in the share price could cause at least some short sellers to move to cover their positions. About 21% of its float is sold short -- a heavy level, although far below what it was when traders used it to set off the meme stock frenzy last year.
After the market close Thursday, GameStop shareholders of record on July 18 will receive three extra shares for each one they own. At that time, the video game retailer's stock will be priced at 25% of the session's closing price to reflect the new shares issued.