Shopify Stock Split: Why It Matters
Shopify (NYSE: SHOP) completed its 10-for-1 stock split after the June 27 trading session. The Canadian e-commerce platform company had traded at over $1,700 per share briefly before the split. Even though it sold in the $300-per-share range by the time the split occurred, the high nominal stock price spoke to the stock's potential.
After the split, Shopify trades near the $33-per-share range. But given Shopify's moves in its industry, this lower nominal price could give an added boost to this e-commerce stock.
At a basic level, a stock split neither helps nor hurts Shopify stockholders. One share at $330 per share holds the same value as 10 shares at $33 per share. The split does not affect the market cap or other valuation metrics. For example, its price-to-sales ratio was not affected and stands at about 9. Other metrics such as earnings per share adjust relative to the new value of the shares.
Source Fool.com
