A stock split and more voting power for the company's billionaire CEO were proposed on Monday, as the company's shares are down over 50% this year.
The CEO ofshopify is Tobi Lutke.
If shareholders approve the stock split at the June 7 meeting, it will take effect on June 28.
According to a statement fromshopify, the planned share split will make share ownership more accessible to all investors.
The new class of stock would be called the founder share and would allow Lutke to increase his voting power to 40% when combined with his Class B holdings.
After news of the proposed stock split, shares rose as much as 3% early on Monday, but by midday, they were up just 0.8%.
The e-commerce firm, which helps companies set up and run online stores, was considered a darling of the market, with its stock surging 180% in 2020 and another 20% in 2021.
The stock has fallen more than 50% so far this year, with the market sell-off caused by the Federal Reserve's interest rate-hiking campaign and Russia's invasion of Ukraine being some of the reasons.
A growing number of companies are seeking a stock split this year. In February, Alphabet proposed a 20:1 split and in March, Amazon proposed a 20:1 split.
Stock splits can lead to a short-term boost in share price. On the day of their announcements, all three companies saw share gains of at least six percent. According to data from Bank of America last month, stock splits historically have provided better share price performance. According to the firm, stocks that split their stock rose by an average of 25% over the next 12 months, compared to 9% for the S&P 500.
Forbes estimates how much the CEO ofshopify is worth. He took the company public in 2015 at a valuation of over a billion dollars. The market value of the company has grown to $75 billion.
The proposal ensures his interests are aligned with long-term shareholder value creation and is key to supporting and executing the strategic vision of the company.
The electric car maker wants to split its stock.
Amazon is the latest Mega-Cap to announce a historic stock split.
The historic stock split means more investors can buy shares.
Here is what the 20:1 stock split means for investors.
All Rights Reserved © 2024
