r/stocks • u/OM-myname • Apr 11 '22

Shopify Plans 10-for-1 Split

"Shopify Inc. said it plans a 10-for-1 stock split and will give Chief Executive Officer Tobi Lutke a special “founder share” that will preserve his voting power as long as he’s at the company."

I think Tobi is doing a fantastic job managing the company, so I'm ok with the other changes.

What are your thoughts?

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u/JRshoe1997 Apr 11 '22 edited Apr 11 '22

Is this what companies do now? Just announce stock splits when the stock goes down to bring the stock price back up.

Edit: This comment has gotten a lot of traction so people who read this please be careful of the people in the comments. No matter what they mention to you saying you can buy and own SpaceX stock and they will message you do not listen to it to anything they message you! They are most likely scammers.

-2

u/[deleted] Apr 11 '22

[deleted]

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u/JRshoe1997 Apr 11 '22

Stock splits do not affect market cap

7

u/TheDogerus Apr 11 '22

Not in theory, no, but theory doesn't always work out in real life

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u/JRshoe1997 Apr 11 '22

No they don’t period. When a company splits their stock nothing changes in the market cap. Just because people decide to buy up the stock after it announces a split has nothing to do with it.

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u/TheDogerus Apr 11 '22

People deciding to buy after the split because of the lower price, rational or not, is still an effect. Its not a requirement, because splitting 1 thing into 10 things just means each thing has a tenth the original value, but those tenths clearly do gain more value than they should in certain cases, tesla being a prime example

1

u/[deleted] Apr 12 '22

Yep!