After the Canadian e-commerce giant completed a 10 for 1 split of its common stock on Wednesday, the shares of Bloomberg-Shopify Inc. fell.
The tech-stock splits this year are the latest in a series of tech-stock splits as companies in the beleaguered sector try to drum up interest among retail investors. Amazon and Alphabet Inc. have also announced stock splits, but the moves didn't boost sentiment amid a broad market selloff on concerns that central bank attempts to rein inflation risked stifling economic growth.
Shopify's shares fell 5.8% Wednesday to C $42.47 in Toronto. This year, the stock has plunged by 76% as e-commerce traffic slows and investors flee growth stocks, particularly sensitive to rising borrowing costs.
It is getting retail trader interest Wednesday with Fidelity customers snapping up shares, making it the seventh most-bought stock on the platform. The popular retail trader chatroom Stocktwits was also trending with the company's ticker.
The share split could have a positive impact on the stock, as some investors perceive lower priced shares of companies to be less expensive than higher priced ones, according to D.A. Davidson analyst Tom Forte said in a note to clients.
The shareholders at the company's annual meeting on June 7 approved the share split, which will make ownership more accessible to all investors, the company said in a statement before the stock split.
A proposal to give Chief Executive Officer Tobi Lutke a special founder share passed with 54% of the vote in favor. Lutke retains 40% of the votes at the company, even though his ownership stake changes. Glass Lewis Co., a prominent advisory firm, said the arrangement was likely opposed by most of the company's shareholders, but it passed because of a single influential director.
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