Ecommerce start-up Shopify said Monday it is planning a 10-for-1 stock split, while seeking shareholder approval for a "founder share" for its CEO Tobi Lutke to increase his voting power.
Upon shareholders' approval, Shopify will authorize and issue a new class of non-transferable founder share to Lutke, giving the executive a total voting power of 40% when combined with his existing Class B shares.
"Tobi is key to supporting and executing Shopify's strategic vision and this proposal ensures his interests are aligned with long-term shareholder value creation," Robert Ashe, Shopify's lead independent director, said in a statement.
Shopify shares dipped 0.5% on Monday.
The Ottawa-based company got a big boost over the last two years, as the firm helped small businesses quickly move operations online during the pandemic's forced shutdowns. The stock soared about 185% in 2020 and another 21% in 2021. However, shares have fallen more than 50% year to date as the pandemic boost started to fade.
Separately, the proposed 10-for-1 split of Shopify's Class A and Class B shares is subject to the approval of at least two-thirds of the shareholder votes. If approved, investors will receive nine additional Class A shares or Class B shares for every one share held after the close of business on June 28.
The company said the stock split is to make share ownership more accessible to all investors. A slew of Big Tech companies including Amazon, Alphabet and Tesla announced similar moves in recent weeks.
A stock split theoretically could boost retail share ownership as the cheaper stock price is more accessible to a wider range of investors. However, it doesn't change a company's underlying fundamentals or the intrinsic value of its shares.