Online shopping dominated during the pandemic but retail giant Amazon (AMZN) wasn't the only epic winner of this movement.
Tech platform Shopify (SHOP), which helps businesses sell online, saw revenue and market value jump significantly since 2020.
The company's software is used by merchants to run their businesses online. Shopify says its e-commerce platform is built to enable businesses of all sizes “to sell to anyone, anywhere.”
And during the pandemic, seamless online shopping became critically important since people couldn't go to stores.
Shopify for the first time reported quarterly sales of over $1 billion in the three months ended December 2021. It's scheduled to report first-quarter earnings on May 3.
Shopify's stock price has risen 48% since the beginning of the pandemic, to nearly $604 a share, clocking a market value of $76 billion based on Friday's close.
Now, the Ottawa company is proposing to make its shares more accessible to average investors while also ensuring that its chief executive retains control of the company.
10-for-1 Stock Split
The e-commerce platform on April 11 said that it was planning a 10-for-1 stock split.
To be sure, a stock split in and of itself doesn't add any value. It increases the number of shares outstanding but reduces the price per share proportionately, so it does not change a company's market capitalization.
But by reducing the price per share, a split can, as Real Money Columnist Stephen "Sarge" Guilfoyle argued last month, make a stock more appealing to ordinary retail investors.
Shopify adds to a growing list of companies that have split their shares to make them more accessible.
In early March, Seattle tech giant Amazon (AMZN) declared a 20-for-1 stock split. Google parent Alphabet (GOOGL) as well as the videogame retailer GameStop (GME) have also declared share splits this year.
And electric-vehicle giant Tesla (TSLA) is asking its shareholders for approval to split its stock for the second time in two years.
Securing the CEO's Control
Shopify also will ask shareholders to approve a so-called founder share for Chief Executive Tobi Lütke. The issuance would give the CEO, his family and his affiliates 40% of the total voting power over Shopify.
Lütke is a computer programmer who started Shopify in 2006. He'd based the platform on coding he'd done to sell snowboarding equipment online, the company said.
"The shift to digital commerce has been supercharged over the last two years, permanently changing the landscape of our industry and positioning Shopify at a key inflection point in its growth story," Shopify's lead independent director, Robert Ashe, said in a statement.
The director added: "These changes will enhance Shopify’s strategic flexibility and ability to pursue value-enhancing organic and external opportunities. 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."
Shopify will ask holders to approve the split and the founder-share structure at its annual meeting on June 7.