The Clap Shopify (NYSE: SHOP) announced a 10-for-1 stock split.
The deets Shopify’s board proposed a 10-for-1 stock split, subject to the approval of shareholders. The company announced that both its Class A & Class B shares would be split, as well as the issuance of new founder shares to its founder Tobi Lutke.
Claps Class There are several differences between Class A & B shares:
Class A shares generally carry more voting power
Class A shares are higher in payment priority in case of company liquidation
Class B shares can be issued in the case that Class A shares are too expensive for some investors
On the other hand, founder shares are shares issued to the founder of a company at par value, & can only be exercised (taken advantage of) on a prespecified date.
Why this matters Shopify is the latest to propose a stock split, after Amazon, Google, Tesla, & GameStop all recently announced stock splits. The stock split would see Shopify’s share price go from around $600 (last closing price) to around $60.
The founder shares would also mean that Lutke would get to keep a total voting power of 40% even after the stock split.