On Tuesday, Shopify announced the approval of its 10 for 1 stock split. What does this mean for investors and the future of Shopify?
Issuing A New “Founder Share” For CEO Tobi Lütke
100% Ownership Of Shopify
Shopify’s CEO and founder, Tobi Lütke, will be issuing a new “Founder Share” in connection with the stock split. The new share will represent 100% of his ownership stake in Shopify.
What this means is that after the stock split, there will be two classes of shares: common shares and Founder shares.
The move is designed to ensure that Lütke maintains control of the company even as it grows and becomes more valuable. It also aligns the interests of shareholders and employees, who will now have a vested interest in the long-term success of Shopify.
What Does the Stock Split Mean for Investors?
In the short term, the stock split may also lead to an increase in the price of Shopify shares as more investors become interested in owning a piece of the company.
So what does this all mean for you? If you’re an investor, the stock split is good news. It means you can increase your ownership stake in Shopify without having to pay more money. And if you’re considering investing in Shopify, the stock split may make the company more attractive to you.
Either way, it’s a vote of confidence by management in the future growth of the company.
When Does The Stock Split Happen?
The stock split will take effect on June 28, 2022. This is the date that Shopify will issue new shares to investors of record as of June 22, 2022. If you own shares of Shopify on this date, you will receive nine additional shares for each share that you own.
For example, if you own 100 shares of Shopify, you will receive 900 additional shares on June 28, 2022. The new stock price based on the split will take effect on June 29th, 2022.
What Does the Stock Split Mean for the Future of Shopify?
While the move does not have any immediate financial implications, it does signal that Shopify is confident about its future prospects. The company is expected to continue growing at a rapid pace, and the stock split will make it more affordable for investors to own a piece of the company.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.