Business

Shopify acts to cash in on stocks skyrocketing surge

One day after surpassing Royal Bank of Canada to briefly become the most valuable company in the country, Shopify will sell more shares after record closing price

Photo: Paul McKinnon/ Shutterstock
  • Shopify shares rose after surprising 2020 first-quarter results;
  • The e-commerce giant surpassed the Royal Bank of Canada, briefly becoming the most valuable company in the country during Wednesday;
  • As a result, Shopify has announced this Thursday its plans to sell 1.85 million new shares.

Canadian e-commerce firm Shopify has announced this Thursday, 7, its plans to sell 1.85 million new shares. These stocks, disclosed in a regulatory filing, will be available for sale under an offering led by Citigroup and Credit Suisse.

The move comes one day after the e-commerce giant surpassed the Royal Bank of Canada, briefly becoming the most valuable company in the country, as its shares soared due to surprising first-quarter results. Shopify reported an adjusted profit for Q1, announcing on Wednesday, 6, that gross merchandise volume accelerated in April. Among other results, the firm posted revenue of $470.0 million, a 47% increase YoY, exceeding market expectations of $443.2 million.

“While the COVID-19 pandemic has subdued commerce globally and especially strained small and medium-sized businesses, it has accelerated the shift of purchase habits to e-commerce,” the company stated. “Shopify is uniquely positioned to help businesses of all sizes during this time, helping entrepreneurs start online businesses, adapt to an evolving commerce landscape, and manage through a challenging macroeconomic environment.” The e-commerce firm announced its initiatives to support merchants during the pandemic, including a 90-day free trial for new signups, as well as local in-store/curbside pickup and delivery.

We are well-positioned to help our merchants, particularly given the accelerated shift to online commerce. Our strong balance sheet provides us with the flexibility to continue investing in the right merchant-first initiatives, supporting our merchants’ success now and well into the future.

Shopify CFO Amy Shapero

In late April, the e-commerce platform launched Shop, an app designed to operate as a shopping personal assistant, in another effort towards the diversification of the company’s business. Shopify told LABS that Shop will be available in other languages soon, as well as in other markets, including Brazil. Recently, the company has also enabled a transparent checkout for Brazilian consumers through a seamless payment solution launched by the fintech EBANX.

“The vast majority of people are employed by small businesses, and they struggle the most during a crisis,” said CEO Tobi Lütke in the company press release. “The spread of COVID-19 is going to be a tough time for all entrepreneurs. We are working as fast as we can to support our merchants by re-tooling our products to help them adapt to this new reality. Our goal is that, because Shopify exists, more entrepreneurs and small businesses will get through this.”