Shopify: You can’t sell us short


Citron Re­search edi­tor An­drew Left upped his at­tack against Ottawa’s soft­ware star Shopify Wed­nes­day by threat­en­ing to pub­lish a sec­ond neg­a­tive re­port about the com­pany’s busi­ness.

The brash short-seller, who earns money by bet­ting against stocks he be­lieves are over-val­ued, is­sued a re­port last week that crit­i­cized Shopify’s mar­ket­ing prac­tices, call­ing the firm a “get-rich-quick” scheme.

Left told Reuters Wed­nes­day that he was ex­am­in­ing other as­pects of Shopify’s busi­ness and that he’d “most likely” pub­lish an­other re­port.

The com­ment halted a brief rally in Shopify’s share price.

After plum­met­ing 23% on the TSX to $112.48 be­tween Oct. 4 and Tues­day, Shopify shares had re­bounded to nearly $121 dur­ing the morn­ing Wed­nes­day.

The par­tial re­cov­ery was in re­sponse to a pair of tweets by Shopify CEO Tobi Lütke, who at 1:25 p.m. Tues­day fi­nally weighed in after a week of si­lence.

“Lots of peo­ple want me to ad­dress the short-sell­ing troll that’s tar­get­ing $SHOP” he wrote in ref­er­ence to Left, be­fore adding: “The irony of an out­fit like Citron ac­cus­ing any busi­ness of be­ing a get­rich-quick scheme should not be lost on any­one.”

Shopify shares closed Wed­nes­day at $118.40.

Lütke ad­vised Shopify loy­al­ists to stay tuned for his com­pany’s next earn­ings re­port for a more com­plete de­fence.

Shopify is ex­pected to pub­lish its third-quar­ter fi­nan­cial re­sults some­time be­tween Oct. 31 and Nov. 6.

S&P Global is fore­cast­ing a loss on record quar­terly rev­enues of $166 mil­lion US, up 66% year over year.

Shopify is ex­pected to start gen­er­at­ing prof­its next year when sales are pre­dicted to top $930 mil­lion US.

LÜTKE Fires back

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