Shopify shares climbed over 3% in morning trading as Shopify planned 10-for-1 split of common stock.
The Canadian e-commerce software firm said Monday that the new structure would “strengthen the foundation for long-term stewardship by Mr. Lutke,” the company’s founder. Under the plan, Lutke, his family and his affiliates would together retain 40% of the votes at the company, even as their ownership share changes.
Lutke would have to give up his founder share if he’s no longer with the company as an executive, director or consultant, Ottawa-based Shopify said in a statement Monday. He wouldn’t be allowed to transfer it to anyone else.
Shopify soared above C$250 billion ($198 billion) in market value during the pandemic as online selling took off, but it has given back most of those gains.
The shares are down 56% this year amid a selloff in richly valued technology stocks -- costing Lutke $6.3 billion in personal wealth. He’s still one of the richest Canadians, with a net worth of $5.5 billion, according to the Bloomberg Billionaries Index.
Stock splits are in vogue in the technology sector after Alphabet Inc., Amazon.com Inc. and Tesla Inc. all got a boost from announcing plans to split their shares.
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