The Shopify logo is seen outside its headquarters in Ottawa, Ontario, Canada, September 28, 2018.
Chris Wattie | Reuters
E-commerce startup Shopify said on Monday it plans a 10-for-1 stock split, while seeking shareholder approval for a “founder’s share” for its CEO Tobi Lutke to boost its voting power.
Following shareholder approval, Shopify will authorize and issue the new class of shares to Lutke, giving the executive an aggregate 40% voting right when combined with his existing Class B shares.
“Tobi is essential to supporting and executing Shopify’s strategic vision and this proposal ensures his interests are aligned with building long-term shareholder value,” Robert Ashe, Shopify’s senior independent director, said in a statement.
Shares of Shopify rose more than 1.5% on Monday before market.
The Ottawa-based company has received a big boost over the past two years as it has helped small businesses get their operations online quickly during the pandemic’s enforced shutdowns. The stock has climbed around 185% in 2020 and another 21% in 2021. However, shares have fallen more than 50% since the start of the year as the pandemic surge began to unfold. blur.
Separately, the proposed 10-to-1 split of Shopify’s Class A and Class B shares is subject to approval by at least two-thirds of shareholder votes. If approved, investors will receive nine additional Class A or Class B shares for each share held after the close of business on June 28.
The company said the stock split aims to make share ownership more accessible to all investors. A slew of Big Tech companies, including Amazon, Alphabet and Tesla, have announced similar measures in recent weeks.
A stock split could theoretically boost retail ownership, as the cheaper stock price is more accessible to a wider range of investors. However, this does not change a company’s underlying fundamentals or the intrinsic value of its shares.