Shopify stock down for a 2nd day after business model challenged by Citron
Firm issues defence of its business
Shopify Inc. stock has dropped 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. It initially dropped another seven per cent Thursday morning at the Toronto Stock Exchange before regaining some ground to close down just over two per cent at $126.19.
On the New York Stock Exchange, Shopify closed at $100.43 US, down from Tuesday's close at $120 US but still above Left's estimate of its value at US$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 can not comment on the matter.
Shopify posted a prominent statement on its website Thursday morning, saying that 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."