Canadian firm Shopify has become an e-commerce giant since its launch in 2006. It developed a string of proprietary e-commerce plugins and platforms, suitable for online shops and in-store point-of-sale systems too. As of July 2022, the company had grown into one of Canada’s 20 largest publicly listed firms by market capitalisation.
The premise of Shopify was to simplify the process of running an online business. It was soon made possible for entrepreneurs to view and manage their product inventory using the native Shopify mobile apps. By 2015, it had grown so much that Shopify filed for an IPO on the New York and Toronto Stock Exchanges.
The Shopify share price was initially listed at $28, significantly higher than its initial offering price of $17 per share. In 2021, its total revenues exceeded $4.6 billion, with over 1.7 million online retailers actively using Shopify’s platform today.
It was pretty much one-way traffic for Shopify stock following its long-awaited IPO. The Shopify share price continued to rise – and significantly at that. During the peak of the Covid-19 pandemic, when e-commerce became more vital than ever before for homes and businesses – Shopify shares peaked at $162.50 in July 2021.
However, it’s been less promising for owners of Shopify stock since, with 2022 proving to be a turbulent period, shedding over 68% of its value. This was due largely to rising inflation, which was hitting the bottom line of online retailers and stockists hard. Meanwhile, the cost-of-living crisis has also impacted the purchasing power of consumers, putting some online firms at risk.
Within its Q3 2022 financial results, Shopify revealed it has $4.9 billion in cash, cash equivalents and marketable securities, although it posted an adjusted net loss of $30m.
Given that the Shopify stock is part of a high-growth e-commerce industry, it’s possible that equities like these can offer significant long-term gains. However, that’s not always the case, as macroeconomic headwinds can play havoc with sectors intrinsically linked to consumers.
With uncertainty and volatility likely to surround the Shopify stock and other e-commerce shares in the short-to-medium term, speculating on the price of Shopify shares could be a sensible alternative. By using a contract for diference (CFD) broker, you can trade the rise (and fall) of an equity’s price, without having to own the underlying asset.
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Why Trade [[data.name]]
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