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