Investors in Shopify Inc. (TSX:SHOP)(NYSE:SHOP) who bought at the time of the company’s initial public offering (IPO) and held until today have been well rewarded over time. Since the burgeoning technology company’s IPO, shares have risen more than 220% on impressive earnings and growth expectations that largely outpace competitors in the e-commerce space.
With the entire e-commerce industry generally in the spotlight after the recent announcement of the acquisition of Whole Foods Market (NASDAQ:WFM) by Amazon.com, Inc. (NASDAQ:AMZN), other e-commerce businesses such as Shopify have been in the spotlight as investors try to decipher how to adjust to news that traditional industries such as the food & beverage industry may be the latest industry to be overhauled by technology.
The majority of businesses served by Shopify happen to be smaller "mom & pop" type of stores looking for an online presence to boost sales. The overall outcome of the recent Amazon acquisition are not known, however, it appears investors have become cautious with SHOP stock, deferring away from this business for the time being until things smooth over.
The recent dip of approximately 17% from Shopify’s peak last month may be indicative of further downward momentum which will drive shares lower, however many long-term bulls on Shopify’s business have taken this dip as a buying opportunity, snapping up shares at a perceived discount to earlier this past month.
With Shopify, I remain on the sidelines as I am one of the investors who cannot make heads or tails out of the current environment.
Invest wisely, my friends.
