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2022 Stock Dividend

A stock split dividend is a type of stock split where new shares are issued to shareholders as a dividend, as opposed to cash. In a typical 'split', often called a forward split, the value of shares and number of shares are adjusted on issuer records without other changes. A stock dividend allows a company to issue a dividend without spending cash, though it does dilute the float and lower the earnings per share of a company.

GameStop's Announcement

GRAPEVINE, Texas--(BUSINESS WIRE)--Jul. 6, 2022-- GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today announced that its Board of Directors has approved and declared a four-for-one split of the Company’s Class A common stock in the form of a stock dividend. Company stockholders of record at the close of business on July 18, 2022 will receive a dividend of three additional shares of the Company’s Class A common stock for each then-held share of Class A common stock. The stock dividend will be distributed after the close of trading on July 21, 2022. Trading will begin on a stock split-adjusted basis on July 22, 2022.

Potential Issues with Delivery

Unfortunately, the stock dividend did not appear to be properly delivered to all investors. GameStop received reports from their shareholders that they were seeing the dividend reflected as a forward split if they saw it reflected at all. Investors experiencing these issues were predominately international investors.

Possible Explanations

Some online discourse focused on the replacement of the CFO in the weeks following the stock dividend, surmising that there was some kind of filing error. Although a popular theory, there is no supporting evidence other than the timing of the CFO's departure.

 

(perhaps some examples of this conclusion being posited by community could be added here, if even necessary)

How DTCC Handles Stock Splits and Stock Dividends

"At times, DTC will announce an Issuer declared Stock Split event as a Stock Dividend (function code 06) or will announce a Stock Dividend event as a Stock Split (function code 02). This occurs when the respective Exchange provides an ex-date ruling that falls outside typical declarations for those events."

Crucially, it is the Exchanges which provide the Ex-Date (not the company) and therefore have the ability to influence how the DTCC files for and provides instruction regarding issuer intention when performing a stock split or dividend.

Ex-Date Definition

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