Shopify stock dips for second straight day

Drop comes after analyst criticized Canadian company

Shopify Inc. stock has plunged for a second day, following a prominent short-seller’s claim that it’s running an overvalued get-rich-quick scheme.

The Canadian technology company issued a defence of its business early Thursday but didn’t specifically refer to allegations published by Andrew Left of Citron Research.

After Left’s comments, Shopify stock plunged by 11.5 per cent on Wednesday and fell 7 per cent more Thursday morning at the Toronto Stock Exchange before recovering in the afternoon.

On the New York Stock Exchange, Shopify was hovering around $100 (U.S.) Thursday afternoon, down from Tuesday’s close at $120 but still above Left’s estimate of its value at $60.

Among other things, Left questioned how many of the merchants that use Shopify would meet the guidelines set by the U.S. Federal Trade Commission. His accusations have not been substantiated by the FTC, which has said it cannot comment on the matter.

Shopify posted a statement on its website Thursday, saying it stands behind its mission and the success of the merchants that use its system.

“Shopify’s growing community of entrepreneurs includes makers, creators and innovators, from students trying to pay for school to merchants who have successfully scaled their businesses,” the company said.

“Shopify has always strived to take the path that leads to more entrepreneurs by designing its platform to remove the technical, operational and financial barriers to enable anyone, anywhere, to build, grow and scale a business.”