The Telegram (St. John's)

Shopify shares plunge after report questions operations

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VANCOUVER - Shopify Inc. shares plunged more than 11 per cent Wednesday after a short-seller report alleged the e-commerce platform is overvalued and operates outside the law. Andrew Left, managing editor at stock commentary website Citron Research, posted a video in which he claims Shopify’s business model does not comply with guidelines set by the Federal Trade Commission.

Left compared its practices to those of Herbalife, which recently settled with the FTC for $200 million and made structural changes after claiming members could “quit their job” upon joining the company.

Left, an activist short-seller whose previous Citron Research reports moved the direction of shares for the likes of Valeant and Blackberry, said the stock should be closer to US$60, prior to any potential involvemen­t by the FTC.

He alleges Shopify’s partners recruit merchants by wooing them with promises of selfemploy­ment and milliondol­lar incomes.

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