GameStop Corp 💾 🛑 (GME) Share Chat

April fools?

If that’s true then would need to ask them what the difference between the 2 is and why they can’t do this.
If they issued cash then I would just pump it back into next year’s ISA and DRS some via CS directly.

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Extremely unlikely in my opinion, Form 8-K was filled 31/03/2022 and not the sort of April fool’s that would be in their best interest, they don’t need to generate interest in their company seeing as there’s already a ton of it right now.

Aye, and there’s that bit of a psychological aspect to ordinary investors preferring to own whole shares rather than fractions, so maybe a few more people will feel inclined to get onboard with a full 1 when they wouldn’t really fancy just holding 0.5 or whatever. Simply makes it appear intuitively more affordable to the layman, and perhaps if they’re already invested they could be more likely to round a purchase up to the next whole share if it seems cheaper to do. Plus I suppose there are popular brokers out there who don’t allow fractional purchases too

Good morning, there’s a difference between stock split and a dividend stock split right?

Yeh they coped with Apple and Tesla stock splits no problem at all.

jbjb posted a helpful link a few messages above:

“As far as I understand it, a stock dividend is not the same thing as a stock split, as the former only issues additional shares to existing stockholders with the company bearing the cost, whereas a stock split dilutes the price by increasing the number of shares in the float.”

Welcome btw

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I can’t speak for Apple, but Tesla have never paid a stock dividend. Tesla issued an 8-K with the intent to issue their first stock dividend several days ago.

So we are all on the same page: a stock dividend and a stock split are not the same thing, and so far, all the communication we’ve had from Freetrade states that in the event of a stock dividend, we will be paid in cash in lieu of new shares (with the cash payment most likely being the value of the shares at the date of the dividend issuance or dividend announcement).

Very happy if someone can correct me on any of this, so please do if anyone has more info!

I was thinking the FT response not the filing :joy::+1:

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Many of us would have seen the screenshot on the GME page and around the internet of a Freetrade community manager stating that Freetrade would not be able to process the dividend proposed by Gamestop and that a cash alternative would be awarded.

Could we please have clarification on why this is?
How this would affect those of us that hold our shares in ISA accounts?
How the value would be calculated?

“On March 31, 2022, GameStop Corp. (the “Company” or “GameStop”) announced its plan to request stockholder approval at the upcoming 2022 Annual Meeting of Stockholders (the “Annual Meeting”) for an increase in the number of authorized shares of Class A common stock from 300,000,000 to 1,000,000,000 through an amendment to the Company’s Third Amended and Restated Certificate of Incorporation (the “Charter Amendment”) in order to implement a stock split of the Company’s Class A common stock in the form of a stock dividend and provide flexibility for future corporate needs.”

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If free-trade can’t handle this, they ain’t doing themselves any favours.

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A cash payment in lieu of the stock dividend is not an acceptable outcome, fine for fractional shares, but for those of us holding full shares, issuing 3 shares for every 1 is what is required.

And before people reply and say just buy more when you get the payment, no - that is not an acceptable solution, prices can change significantly on this stock between the split and issuing the cash, and having to then buy after taxes and fx fees is NOT an acceptable solution

The excuse of not being set up to handle x from freetrade is an old one and getting annoying, too much focus on rolling out to other countries when some of the basics are still not in place

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I agree entirely.
My ISA is maxed (£20k) in GME shares. I was planning on maxing it out again the moment the new tax year starts but now I’m looking at moving brokers and cancelling my freetrade plus subscription.

Can anyone confirm how a cash alternative would be taxed? If its at my personal rate then I will immediately lose 40% of its value which is just crazy. If it can be issued inside the ISA and not be subject to tax then I may consider sticking with freetrade but it would definitely not be the ideal situation.

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Surely the cash will just go into your ISA like any other dividend?

Here’s some clarification: Freetrade can support where a stock split is being implemented in the form of a stock dividend (i.e. a mandatory event where the dividend is paid as stock to everyone). What we can’t support currently are cash dividends where customers have the option to elect to take them as stock. When there is official confirmation from Gamestop on this event, we’ll be able to provide further details.

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In an ISA US dividends are taxed at source

Yeah I know, but he was talking about his 40% personal tax rate which would be a UK tax I believe.

I don’t know if a US stock dividend would be taxed at source?

Thank you for the clarification Rajan07.

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Dividend tax in ISAs

ISAs protect your UK investments from owing tax. But ISAs don’t help in the same tax-efficient way on your foreign investments. So if you receive US dividends in your ISA, the 15% tax will apply. With Freetrade, this all happens automatically, and you won’t be left with any forms to fill or paperwork to file.

Source: How to buy US shares in the UK - Freetrade | Learn

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Thanks for clarifying, Rajan.

At this stage, what we do know is that while Gamestop’s board has approved the idea of a stock dividend the action will still have to be approved by the shareholders.

If the stock split does go ahead, I would expect to receive the shares I am entitled to rather than cash. The terms and conditions clearly state that Freetrade will make ‘reasonable endeavours’ to ensure this is the case. They also specifically mention that an ‘increased number of Securities’ is a possible outcome from a corporate action such as this, so, as you mention, Rajan, Freetrade appears to be able to facilitate a stock dividend.

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