Shopify Racing Higher on Stock Split News

Trader Gregory Rowe works on the floor of the New York Stock Exchange, Monday, Feb. 24, 2020. Stocks are opening sharply lower on Wall Street, pushing the Dow Jones Industrial Average down more than 700 points, as virus cases spread beyond China, threatening to disrupt the global economy. (AP Photo/Richard Drew)

Keep an eye on Shopify Inc. (SHOP).

The oversold stock could run after shareholders approved a 10:1 stock split.

“For the stock split, shareholders of record as of the close of business on June 22, 2022 will receive on June 28, 2022 nine additional Class A subordinate voting shares or Class B multiple voting shares, as applicable, for every one share held,” says Street Insider.

While recent earnings weren’t great, it appears a good deal of negativity has now been priced into the stock.  For its first quarter, SHOP posted adjusted EPS of 20 cents, which came in below expectations for 64 cents.  Net income was $25.1 million, down from $254.1 million.

Weakness may be a long-term opportunity here.

On the news, shares of SHOP are up about $9.34 a share.  We’d like to see it closer to $400 before it splits later this month.