Why own WIX when you can own SHOP?
I say it’s better not to put too much in one stock.
An argument made for not own WIX is that it’s similar to SHOP so why not just own SHOP. Well, I would argue that SQ is a lot more like SHOP than WIX is like SHOP. Both SHOP and SQ offer solutions to merchants. Both have concentrated on small merchants and are starting to see adoption by larger merchants. Both now have a point of sale reader. Both now offer cash advances to their merchants. Both offer analytics benefits to their customers. Both are trying to make running a business online easier.
In contrast, the similarity between WIX and SHOP is that both are involved in e-commerce. SHOP makes it easier for merchants to do business in the e-commerce world. WIX makes it easy to build, maintain, and update a website. WIX also is continuously integrating new tools that enable adding new content and features into websites.
Overall, there is a lot more overlap between SQ’s and SHOP’s addressable markets than SHOP’s and WIX’s addressable markets.
So if you’re going to ask a question like why own X when you can own Y, isn’t it more relevant to ask that about SHOP and SQ than WIX and SHOP?
Chris
10 Likes
I haven’t decided on WIX yet. I’m not a chart guy, but I see WIX is at the 200 day moving average so (maybe I am a chart guy) I’m going to wait to see if it can hold that 200-day.
KC
I haven’t decided on WIX yet. I’m not a chart guy, but I see WIX is at the 200 day moving average so (maybe I am a chart guy) I’m going to wait to see if it can hold that 200-day.
I’m not a chart guy, but that’s ridiculous. Why would the current price have anything to do with the 200 day average price? Don’t you think it’s more likely that it very simply fell as a direct result of earnings last week? What do you think would cause it to fall further, short of another event? Certainly not some mystical attraction to a certain number.
I’m not about calling bottoms, but this certainly seems like the right time to buy. Not based on the price or the chart or anything other than the real events that have transpired:
- Wix reports on 7/27.
- Wix drops from ~75 to 62 on 7/28 and 7/31.
Seems like a pretty direct cause and effect. My interpretation (which doesn’t require great insight): the market didn’t like something in the report. I however found the quarter nearly flawless, and so I’m taking the opportunity to buy.
Bear
long WIX
…and SHOP 
4 Likes
Bear,
I (more) respectfully disagree.
I shall still wait to see if WIX holds. Not rushing in. That would be… ridiculous, so to speak.
Insightfully yours,
KC
I shall still wait to see if WIX holds. Not rushing in. That would be… ridiculous, so to speak.
Sorry, KC. No disrespect intended.
How will you know if it holds? How long do you wait? I think it’s likely you’ll wait as it goes up.
Bear
1 Like
Bear,
How long do you wait?
Not long. It held yesterday.
WIX has been drifting down, slightly, since late April. High around 82.40 with an 86.13 intraday high April 26. So it hasn’t had a lot of momentum the last 3 months.
How long? I guess Thursday or Friday. As I said, I’m not a chart guy, except for when I am. I jumped into BOFI too soon on its last drop so I try to move a bit slower.
Its all good, Bear. Besides, I’m basking in the glow of SHOP +12%, IPGP +9% and I even captured the top +4% of Lumber Liquidators’ +36% move, thanks to Monkey. Take care,
KC
Its all good, Bear. Besides, I’m basking in the glow of SHOP +12%, IPGP +9% and I even captured the top +4% of Lumber Liquidators’ +36% move, thanks to Monkey. Take care,
Nice one KC! Great job, pleased for you.
Ant