Canadian technology giant Shopify Inc. (TSX:SHOP)(NYSE:SHOP) has seen its share price drop approximately 15% during the week ended March 30, with most of the attention seemingly centering on the comments of prominent short-seller Andrew Left, who has targeted Shopify for some time now. Late last year, Mr. Left wrote of his initial short thesis on the up and coming tech firm, citing a higher than reported churn rate as his key bearish thesis.
The most recent report cites concerns that Shopify’s relationship with Facebook, Inc. (NASDAQ:FB) may have influenced the company’s rise, and with a strict crackdown on consumer privacy expected for all social media platforms, the bearish camp has asserted that any slowdown in Shopify’s growth level is likely to inhibit share price growth, given the fact that the company is currently standing on top of stilts in the form of a sky-high revenue growth rate at this point in time.
What Shopify does have going for it, however, is a robust clientele and a growing market of small to medium sized merchants who have chosen the Shopify channel over others to sell their wares. The ability for Shopify to continue to enhance and further engrain themselves into the supply chain models of various businesses around the country is going to be the greatest challenge for this company in the quarters and years to come. At this price level, I would caution investors to look elsewhere for value, given the headwinds short-sellers such as Mr. Left provide.
Invest wisely, my friends.
