GameStop shares are about to get less expensive

The company announced Wednesday that its board approved a 4-for-1 stock split, effective July 22. Shares of the meme stock darling soared more than 8% in early trading following the news.

GameStop shares have fallen back to Earth following a Reddit-fueled spike last year. The stock is down about 16% this year, mirroring the broader market sell off.

For current GameStop (GME) shareholders, the overall value of their investment will stay the same, but they will own four times as many shares when all is said and done.

Companies split their stocks for numerous reasons: Splits can put a stock’s price within reach of smaller, individual investors, help companies increase liquidity and create more demand for a stock.

Although deep-pocketed institutional investors are typically unfazed by high share prices, individual investors might be turned off by sky-high price tags. The growth of zero-fee trading apps, including Robinhood, E-Trade and others, have helped made stock splits more attractive…

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