Interesting Article on Shopify

Most of us who frequent this board also look at Seeking Alpha from time to time to see if there are articles that my be relevant to the companies we are investing in. A recent article (Oct 13/17) may have escaped the attention of some because Shopify’s name did not appear in the title. I think the discussion of churn and TAM in relation to Shopify’s business are interesting. The link to the article is as follows;

https://seekingalpha.com/article/4113367-industry-insider-ta…

Cheers Everyone
Cleverbear1

19 Likes

Most of us who frequent this board also look at Seeking Alpha from time to time to see if there are articles that my be relevant to the companies we are investing in. A recent article (Oct 13/17) may have escaped the attention of some because Shopify’s name did not appear in the title. I think the discussion of churn and TAM in relation to Shopify’s business are interesting. The link to the article is as follows;

https://seekingalpha.com/article/4113367-industry-insider-ta…

Cheers Everyone
Cleverbear1

Thanks, clever bear, I was just going to recommend that article myself.
Saul

https://seekingalpha.com/article/4113367-industry-insider-ta…

2 Likes

What I loved about this article was how he took apart Left’s arguments. As you remember Left said we should google “Shopify millionaire” and that the slew of hits proved that Shopify was a scam. Well this author googled “Amazon millionaire” and google said there were approximately 13,800,000 (!) hits, (that’s thirteen million eight hundred thousand!) showing that by this thinking Amazon must be a many times larger scam!

etc, and on through all of Left’s phony accusations…

Saul

5 Likes

I liked the article too Saul - it and a couple of the comments after really demolished it. I’ve actually turned from being reasonably narked about Left to now regarding it all as a Godsend.

Of the 3 possible reasons a stock could drop big time…

  1. Underperformance or deterioration of underlying fundamentals
  2. Stock market correction or crash
  3. Misinformation that is completely bogus
    I regards (3) which I believe to be the case we are facing to be the most benign and advantageous. It means with no change in risk there is an opportunity to sell out of other holdings at high price and buy into SHOP at a much lower price whilst the company trading continues along a stellar course.

The comparisons with Herbalife were bogus scare tactics.
The threat of FTC is just totally rubbish - are they really going to regulate a Canadian company for having created some millionaires? Meanwhile to get some perspective, Facebook has been accused of allowing terrorists to plot atrocities on its platform and Ali Baba has been labeled Notorious.

I have nibbled twice since the drop and am awaiting an opportunity to move a significant tranche into SHOP now around the 90 or below. I see this as a total favour from Left now.

A

6 Likes

Yeah, this opportunity really came out of Left field.

Enjoy,
Brian

8 Likes

Loved his points about how the TAM is waaaaaaaaaaaay bigger than 500k merchants.

But this was the best:

Valuations take into consideration this other factor called growth, who knew!?

That’s kinda the point, isn’t it? If Shopify were growing at even 40%, you could fairly easily conclude that they’re overvalued. But they aren’t, are they? Last quarter they grew at 75%.

The difference may not be obvious to some. Both are great, of course. But if you grow at 40% for 10 years, you turn $100 into almost $3,000. If you grow at 75%, $100 becomes $27,000.

Bear

2 Likes