Shopify Inc (NYSE: SHOP) is a well-known e-commerce platform, providing merchants with an easy way to set up and manage their online stores. It has become one of the most successful companies in the sector, and its stock price has skyrocketed in recent years. But did Shopify ever do a stock split?
The answer is yes. On August 10, 2020, Shopify announced a four-for-one stock split, which took effect on August 24, 2020. This means that for every four shares of Shopify stock that an investor owned, they would receive four new shares in exchange. So if an investor owned 100 shares of Shopify before the split, they would now own 400 shares.
Why did Shopify do a stock split?
There are a few reasons why a company might choose to do a stock split. The most common reason is to make the stock more accessible to a wider range of investors. By splitting the stock, it reduces the price per share, making it more affordable for smaller investors to buy in. It also makes it easier for larger investors to purchase larger amounts of the stock.
Another reason why a company might do a stock split is to increase the liquidity of the stock. By increasing the number of shares available, it makes it easier for investors to buy and sell the stock, as there are more shares available to trade. This can help to increase the trading volume, which can lead to a higher stock price.
What effect did the Shopify stock split have on the stock price?
In the short-term, the stock split had a positive effect on the stock price. After the split, the stock price rose sharply, as more investors were now able to buy in. The stock has since continued to rise, and is now trading at over $1000 per share.
What are the advantages of a stock split?
The main advantage of a stock split is that it can make a stock more accessible to a wider range of investors. By reducing the price per share, it makes it more affordable for smaller investors to buy in. It also makes it easier for larger investors to purchase larger amounts of the stock.
Another advantage is that it can increase the liquidity of the stock. By increasing the number of shares available, it makes it easier for investors to buy and sell the stock, as there are more shares available to trade. This can help to increase the trading volume, which can lead to a higher stock price.
Conclusion
Shopify did a four-for-one stock split in August 2020, which made the stock more accessible to a wider range of investors. The stock price rose sharply after the split, and has since continued to rise. The advantages of a stock split include making a stock more accessible to a wider range of investors, as well as increasing the liquidity of the stock.
