Originally published on Best Stocks Source: Getty ImagesIn April, a few big companies announced their stock split. That was the case of Apple which raised its stock price by 6.4% on the day of the announcement. Tesla also announced a split of its stock, with a 6% gain on the announcement day. But when GameStop announced its stock split, the stock plumbed by 10%.Contents hide 1 A “misunderstood” stock split.2 GME performancesA “misunderstood” stock split.Source: Getty ImagesA stock split is generally a good thing. A stock split is a way for a company to increase the number of shares available. After a company does a stock split, each shareholder’s share of stock currently owned becomes more valuable. In addition, depending on the size of the company and the demand for its stock, a stock split may make it more difficult or easier to buy in. As a result, investors see stock splits as a good thing, and these announcements are normally welcomed with bullish trends. So why hasn’t this been the case for GME?We identified two reasons why GME has followed a bearish trend to its stock split announcement.The first reason is that GameStop approached this stock split differently from usual. The split will not present investors with new shares. Instead, the split takes a ‘dividend’ format with investors receiving a stock dividend rather than a cash payout at a specific cutoff date. The split will increase A-class shares from 300 million to one billion.The second reason is that everything is exaggerated when it comes to GME, and ups and downs are the norms rather than the exception. However, the stock split presented by GME is not necessarily a bad thing, and still, long-term investors see GME as one of the best stocks to buy now. As proven many other times, GME investors tend to respond to the market reaction rather than the real events. This happens to all stocks, but when it comes to GME, this phenomenon is amplified as boosted by Reddit and other communities.GME performancesSource: Getty ImagesThere are more than 7,200 video game and gaming accessory stores in the U.S. alone, which proves that there is lots of demand for a business that’s still growing. With most of its sales coming from game software and hardware, it should be no surprise that video game retailers have been on the rise.The video game industry has been steadily rising for the past few years, and it doesn’t look like this won’t stop anytime soon. GameStop is the leader in this market. The company has weathered several major headwinds in its history, including the rise of digital distribution, the shift to mobile and online gaming, and the growth of online gaming culture.The company’s CEO, Matt Furlong, explained that GameStop’s key differentiator is its proprietary trading program, which allows it to buy and sell games at a cheaper rate than competitors. He said that the program has successfully increased the company’s profitability and kept less profitable competitors in business. GameStop has successfully turned a profit in a declining environment by trading at a lower rate of return than competitors and purchasing less profitable but less efficient stores.