Shopify hit new highs yesterday

Shoppers’ rush to online stores during the pandemic propelled shares in Shopify to new highs yesterday, after it said purchases through its network of ecommerce sites more than doubled in the second quarter, surpassing spending on eBay for the first time. Shopify’s revenues rose 97 per cent to $714.3 million compared with the same period a year ago, busting through Wall Street’s consensus forecasts of about $500 million. Gross merchandise volume, a measure of consumers’ total spending through Shopify’s network of stores before fees and revenue splits with shop owners, rose 119 per cent year on year in the second quarter to $30.1 billion… Shopify saw a particular increase in food, beverages and tobacco, as well as a recovery in its traditional mainstays of apparel and cosmetics. New retailers joining Shopify in the quarter included cowboy hat maker Stetson and brewer Molson Coors… Shopify’s stock initially opened 11 per cent higher at a new all-time intraday high of $1,107 yesterday, giving it a market capitalisation of $130 billion. Its shares have more than tripled in value during the past 12 months as it grew to become the largest ecommerce platform after Amazon in the US. Shopify’s valuation is now triple that of eBay, whose shares opened 3 per cent lower after it reported what it called its “best quarter in 15 years” on Tuesday afternoon. While eBay’s second-quarter earnings beat analysts’ forecasts, its 2020 outlook fell short of Wall Street’s expectations. 

Tim Bradshaw