Chris Wattie | Reuters Newly-owned e-commerce company Shopify said Monday it was planning a 10-to-1 split, seeking shareholder approval for a “founding shareholder” for its chief executive, Tobi Lutke, to increase its voting power. Following the shareholders’ approval, Shopify will authorize and issue a new class of non-transferable founding shares in Lutke, giving the executive a total voting power of 40% when combined with existing Class B shares. “Tobi is the key to supporting and enforcing Shopify’s strategic vision, and this proposal ensures that its interests align with long-term value creation for shareholders,” said Robert Ashe, Shopify ‘s chief executive officer, in a statement. . Shares of Shopify rose more than 1.5% on Monday before the purchase. The Ottawa-based company has seen a big boost over the past two years as it helped small businesses move their Internet business quickly during the pandemic’s forced shutdowns. The stock jumped about 185% in 2020 and another 21% in 2021. However, stocks have fallen more than 50% from year to date as the pandemic boom began to weaken. Separately, the proposed 10: 1 split of Shopify’s Class A and Class B shares is subject to the approval of at least two-thirds of the shareholders’ votes. If approved, investors will receive nine additional Class A shares or Class B shares for each share held after the close on June 28. A stock split could theoretically boost retail stock ownership, as the cheaper share price is more affordable to a wider range of investors. However, it does not change the underlying fundamentals of a company or the intrinsic value of its shares.
