But other than that, Chris, there's really no purpose to these things.Ĭhris Hill: Let's move on to Peloton. You're helping make a market for your stock. Then you actually have something that is useful to the shareholder. It makes it more vibrant, more people can get in on it. In that instance, splitting your stock is actually very helpful. Tim Beyers: Usually, when there is a great rationale for a stock split, it's if a company that goes public has a stock that is materially illiquid, meaning that there aren't a lot of shares out there to trade, then it makes it hard to make a market for those shares because there just aren't that many to trade. I'm just not seeing the same rationale that I saw with Amazon. I didn't also see it as much with Shopify when they split their stock. I'm not really seeing the rationale as much with GameStop. It seems like a good rationale for Amazon. Because that's the obvious first question anytime a company announces a stock split. It creates zero value, but this is why I call it the finger trap, it introduces more opportunity for more shenanigans to happen with GameStop stock.Ĭhris Hill: I thought Andy Jassy, CEO of Amazon, did a nice job of explaining why they were doing it. Will this lead to more activity in GameStop stock? Well, there's going to be more shares, so there's going to be more opportunity to do things with GameStop shares. Here's the thing that's interesting to me, Chris, and I don't know that there's anything to this but there's going to be more GameStop shares, which means there's going to be more things to do because there are going to be more GameStop shares. There's some enthusiasm about this because there are more shares and it means absolutely nothing, zero. It's a little bit of artificial sweetener.

This is adorable, and oh, Lord, I can't get my fingers out of this.' It's the thing that is thrilling for a minute. Those little Chinese torture devices, you put your two fingers in and like, 'Oh, I can't get my fingers out here. But let's be clear, you have just been handed the finger trap. Yes, congratulations to GameStop shareholders. This is what's frustrating but both interesting. Because you're presuming that it's actual news and not noise. Tim Beyers: See, I like the way that you used the word news there. That's what we're seeing with Game, we saw it earlier this year when Shopify did it, we saw it when Amazon did it, when Alphabet announced that split is happening next week, and kudos to the GameStop shareholders because the shares are up six percent on the news that it's going to split 4-for-1. The one thing that has proven true is that if a company announces a stock split, their stock is going to go higher that day. I think if there's one thing you can count on in this stock market, in a year when there's been so much red, and even strong profitable companies come out with great earnings reports and their stock sell off.

Let's start with GameStop, because GameStop announced that it is splitting its stock 4-for-1, this takes effect on July 22nd. Chris Hill: Let's do the show so you can get fully caffeinated.

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