Stock Split Information FAQ
To assist stockholders that may have questions related to GameStop's stock split announcement on February 12, 2007, we have compiled information on what we believe will be the most frequently asked questions related to our stock split. If your question is not addressed, please feel free to contact our transfer agent, The Bank of New York at the address indicated below or send a message to GameStop's Investor Relations Department at email@example.com.
A: This action reflects the confidence GameStop has in the future of our buy, sell, trade model as well as our ongoing efforts to increase stockholder value.
A: A 2-for-1 split means the investor will have twice as many shares as before, at half the market price. The split does not change the aggregate value of the shares you own. The split increases the number of shares outstanding, but also proportionately lowers the value of each share, so that the total value of all shares combined initially remains the same. The end result is that you own more shares, at a lower price per share, equaling the same total value.
As of the record date (February 20, 2007), if an investor owns 100 shares of GME common stock and the market price is $60.00/share, that investor's total value is $6,000.00. After the split, the investor will have 200 shares of stock, but the stock price will be cut in half to $30.00/share. The investor's total investment value in GME remains the same at $6,000.00 until the stock price moves up or down, and each investor's proportionate interest in GME will be unchanged as a result of the stock split.
A. For each share of GME common stock held on the record date at the close of business on February 20, 2007, you will receive one additional share of GME common stock. The record date determines which stockholders are entitled to receive additional shares due to the stock split.
A: On or about March 16, 2007. This is the date The Bank of New York (GameStop's stock transfer agent), mails written notice to registered common stockholders indicating their split-adjusted share amounts.
A: March 19, 2007 is the date that GME common stock will trade on the NYSE at the new adjusted price.
A. Stockholders are generally entitled to receive the shares from the stock split if they own or purchase shares up to and including the payable date (March 16, 2007).
If you purchase your shares between the record date (February 20, 2007) and the payable date (March 16, 2007), you are generally entitled to receive an amount of split shares equal to the shares you purchased.
If you sold your shares between the record date (February 20, 2007), and the payable date (March 16, 2007), you are not entitled to the split shares on the shares you sold.
A. Our stock transfer agent, The Bank of New York, mails written notice to registered stockholders indicating their split-adjusted shares. If your stock is currently held in a brokerage account, the information will be sent directly to your broker.
A. You will not receive a stock certificate for the new shares. Registered holders of GME common stock will receive the additional shares through the Direct Registration System ("DRS"). This means that you will have full ownership of your shares without the responsibility of holding the actual certificates.
A Direct Registration Transaction Advice ("DRTA") will be mailed to you and is your conformation; it will indicate the number of additional shares you own as a result of the stock split. Keep it with your existing stock certificates and other important documents as a record of your ownership.
A. If you have shares of GME common stock in a brokerage account, the shares from the stock split will be transmitted to your broker automatically with no action required on your part. The number of shares sent to your broker will be equivalent to the number of shares held in your brokerage account on the record date.
You may want to contact your broker directly for an account statement reflecting the additional shares credited to your account as a result of the stock split. Please note that the Direct Registration Transaction Advice (DRTA) will only reflect shares held in your registered stockholder account held at the Bank of New York.
A: The receipt of these additional shares will not result in taxable income under existing U.S. tax law. The tax basis of each share owned before the split will be allocated equally between the old share and the new share you received. The new shares will be treated as if they were acquired on the same date as the shares with respect to which they were issued.
The foregoing summary does not constitute tax advice. It does not purport to be complete or to describe the tax consequences that may apply to particular categories of stockholders. Individual stockholders should consult with their personal tax advisor regarding their specific tax circumstances.
A: The stock split will not impact your stockholder voting rights. Following the stock split, GameStop stockholders will be entitled to vote on twice as many shares. However, the stockholder's proportionate vote will remain the same relative to other stockholders, assuming that the stockholder's holdings remain unchanged.
A: You can reach the Bank of New York by:
The Bank of New York Shareholder Relations Department
P.O. Box 11258
Church Street Station
New York, NY 10286