Shopify (NYSE:SHOP) has been one of the most promising stocks on the market in recent years. Since its IPO in 2015, the stock has more than quadrupled in value, gaining more than 400%. This has made it one of the best performing stocks of the past five years.
But with the stock’s recent surge in value, many investors are wondering if a Shopify stock split is in the near future. A stock split is a corporate action where a company divides its existing shares into multiple new shares in order to reduce the share price and make it more accessible to a wider range of investors.
To answer this question, let’s take a look at what Shopify has said about a potential stock split in the past, and what the future might hold.
What has Shopify said about a stock split in the past?
In the past, Shopify has been vocal about its stance on stock splits. In its IPO prospectus, the company stated that it had no plans to split its stock in the near future. This was reiterated by Shopify CFO Russ Jones in 2017, who stated: “We have no plans to split the stock. We want to ensure that our shareholders are rewarded for their loyalty over the long-term.”
In addition, Shopify CEO Tobias Lütke has previously stated that the company wants to remain accessible to long-term investors, and that a stock split would be counter-productive to this goal.
What could the future hold?
Of course, Shopify’s stance on stock splits could change in the future. If the stock continues to rise, the company may decide that a split would make it more accessible to new investors.
However, it’s important to remember that stock splits don’t actually increase the value of a company’s shares. They simply reduce the share price in order to make the stock more accessible to new investors.
It’s also important to consider the impact that a stock split could have on the company’s existing shareholders. While a stock split could make the stock more attractive to new investors, it could also negatively impact existing shareholders by diluting their holdings and reducing their overall return on investment.
Conclusion
In conclusion, it’s impossible to predict whether or not Shopify will decide to split its stock in the future. However, the company has been vocal about its stance on stock splits in the past, and it’s clear that the company wants to remain accessible to long-term investors. While a stock split could make the stock more attractive to new investors, it could also negatively impact existing shareholders. For these reasons, it’s likely that Shopify will not split its stock in the near future.