Shopify Inc. (SHOP: US) launched in 2006 in Canada after beginning as a platform to sell snowboards online. Ultimately, it advanced to be one of the world’s top e-commerce platforms. In 2015, the company went public.
In 2020, the COVID-19 pandemic closed down stores and limited social contact. More people kickstarted YouTube channels, freelancing services and opened up online stores. Shopify’s demand and subsequently, its stock soared from the beginning of 2020, all the way till 2021.
But since then, and in the ongoing year of 2022, $SHOP has nosedived at an alarming rate.
Insiders Planning To Dispose Shares
Amid numerous sales, there have been two eye-catching cases of Shopify insiders filing Form 144. On December 12, 2021, 7 insiders made plans to sell their $SHOP shares. The highest valued trades, mostly through broker Solium Capital Inc., were as follows:
- Company COO - Tobyn Shannan - planned to sell 6,234 shares worth around $8.71M.
- President Harley Finkelstein filed his form of 11,811 shares, valued at $16.5M.
- Amy Shapero, Shopify’s CFO filed for 12,939 shares worth $18.07M.
- Director, Robert Ashe, filed for 15,000 shares at a total value of $20.96M, through Solium Financial Inc.
Multiple #insiders at SHOPIFY filed #Form144 on Dec 12 🐻— 2iQ (@2iqresearch) December 14, 2021
Seven insiders including the President, CFO, & COO plan to sell a total of $65.36M worth of $SHOP #stock 🤑
🏢 Broker: SOLIUM CAPITAL
💁 #Stockprice down by 15.66% over last month@Shopify #insidersellling #smartmoney pic.twitter.com/UuQ5rRmOJf
While the sales are ongoing, more insiders have joined the ones listed above in bigger filings. On March 11, 2022, yet another 7 insiders filed more Form 144s, most of which are continuing the trend from December with the same broker. President Finkelstein, COO Shannan, and CFO Shapero all followed up with more Form 144s.
A new addition to the list was John H. Phillips - Company Director- who filed his form through the broker, CIBC Private Wealth Management, for 12,363 shares worth $6.73M.
To sum up, the total value of the shares to be sold in March came out to $25.15 million.
🚨#Form144 filed at SHOPIFY INC— 2iQ (@2iqresearch) March 15, 2022
Multiple #insiders @Shopify plan to sell $SHOP🐻
💰No. of shares to be traded: 46,193
💵Value: $25.15 M
📅Notice date: 2022-03-12
🏦Broker: SOLIUM FINANCIAL INC & CIBC PRIVATE WEALTH MANAGEMENT#InsiderSelling #Bearish pic.twitter.com/Xw3I65OlG9
Earnings with Zero Effect
Shopify relayed its soaring Fourth Quarter and Full-Year Earnings on February 16, 2022. The company’s total revenue for Q4 came out to $1,380.0 million, which was a striking rise of 41% from Shopify’s revenue in 2020. In turn, the total revenue for 2021 was 57% higher than in 2020. Not stopping here, Shopify also made advancements in its services: introducing Tiktok Shopping, a new Spotify channel, expanding the checkout Shop Pay, among others.
But the more jaw-dropping news is that even positive earnings couldn’t help $SHOP. On the day of the earnings reveal, the stock closed at $746.85, followed by $660.00 the very next day. Since then the stock has collapsed further by almost 25.9%.
A case study suggested reasons being that most tech stocks are presumably overvalued, and the ‘2022 outlook’ section of the earnings was dismal. To quote the report: “For 2022 we expect, Year-over-year revenue growth to be lower in the first quarter of 2022 and highest in the fourth quarter of 2022… we do not expect the COVID-triggered acceleration of e-commerce in the first half of 2021 from lockdowns and government stimulus to repeat in the first half of 2022.”
The stock has been diving since the beginning of 2022. On January 3, 2022, the stock closed at $1,363.14 but since then has spiraled downward. On March 15, 2022, $SHOP closed at an astonishingly low value of $553.43.
But in a positive turn of events, $SHOP went up by nearly 7.98% in a single day on March 15, 2022. Evidently, $SHOP is still on the list of ‘Long-lasting stocks’, even if it is somewhere at the end.