Shopify shares slide after bid to lure investors with stock split
Shopify Inc. shares fell after the Canadian e-commerce giant completed a 10-for-1 split of its common stock on Wednesday.
It’s the latest in a parade of techstock splits this year as companies in the beleaguered sector attempt to drum up interest among retail investors.
Amazon.com Inc. and Alphabet Inc. have also announced stock splits, but the moves failed to boost sentiment amid a broad market sell-off on concern central bank attempts to rein inflation risked stifling economic growth.
Shopify’s shares fell as much as 6.1 per cent Wednesday to $42.34 in Toronto. They closed the day at $42.59. The stock has plunged about 75 per cent this year as e-commerce traffic slows and investors flee growth stocks, particularly sensitive to rising borrowing costs.
It was getting some retail trader interest Wednesday with Fidelity customers snapping up shares, making it the seventh most-bought stock on the platform.
The company’s ticker was also trending on popular retail trader chatroom Stocktwits.
“While it does not change the fundamentals for the stock, we believe this split could have a positive near-term impact on shares as some investors perceive lower priced shares of companies to be less expensive than higher priced ones,” D.A. Davidson analyst Tom Forte said in a note to clients.
The share split, which was approved by shareholders at the Ottawa-based e-commerce enterprise’s annual meeting on June 7, “will make ownership more accessible to all investors,” the company said in a statement before the stock split.