After a long stretch of seeing its stock rise and often beat the market, shares of GameStop (GME 5.16%) are heading lower this morning, down 3.9% as of 10:42 a.m. ET. Today, however, the video game retailer's performance is worse than the market as a whole, with the Dow Jones Industrial Average and S&P 500 both falling less than 1% so far.
It's a notable decline for GameStop if only because its shares will split today after the market closes. They will start trading tomorrow at a new, lower price to reflect the 4-for-1 stock split that will occur.
Stock traders have been driving GameStop shares higher all week long in anticipation of the split, and in fact the stock is up 30% in July following the retailer announcing it would be splitting its shares.
Investors have been waiting since March for GameStop to formally announce the action. It said back then it was massively increasing the number of shares outstanding, from 300 million to 1 billion, for the purpose of splitting the stock.
The share increase needed to be approved by shareholders first, though, before the board could approve the split. Once investors signed on, it became simply a matter of when GameStop would announce the split.
Some traders are still clinging to the hope the stock split will trigger the "mother of all short squeezes." GameStop's stock remains heavily shorted, with 21% of its shares sold short, but just like those who are long, short-sellers will see the price of their shares reduced by 75%.
It also won't place any additional financial burden on the shorts simply because the split has been described as a "dividend."