Shares of Shopify Inc (NYSE: SHOP) opened roughly 2.0% up on Monday after the Canadian multinational eCommerce company announced plans of a stock split.
Stock split could be executed by the end of June
This morning, Shopify said it was considering a 10-for-1 stock split in a bid to make shares more accessible for potential investors. The announcement follows a similar move from tech giants, including Apple, Amazon, and Alphabet.
The eCommerce platform will seek approval from its shareholders for the stock split. If two-third of them vote in its favour, the stock split will go live on June 28th. A stock split does not alter the intrinsic value of the company.
In mid-February, Shopify reported market-beating results for its fiscal Q4 but gave disappointing guidance for the first half of 2022.
Shopify is also seeking approval for ‘founder share’
Also on Monday, Shopify said it wants to issue “founder share” to CEO Tobi Lutke. The new class of non-transferable shares will increase the founder’s voting power to 40%.
Such a move is also subject to shareholders’ approval. Robert Ashe – lead independent director at Shopify said:
Tobi is key to supporting and executing Shopify’s strategic vision and this proposal ensures his interests are aligned with long-term shareholder value creation.
Shopify shares have been in a freefall since mid-November 2021 after a sharp surge in the stock price during the pandemic that accelerated online shopping. SHOP is now down 55% for the year.
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