Shopify results

stock based comp is a real expense

Sort of… The expense is not paid by the company but by the shareholders via share dilution. The company actually gets some cash from the sale of the shares on the assignment of the option.

I wish FASB had never made GAAP include stock options, it really screws up the accounting. It’s even worse for small companies that have issued warrants to buy shares. Unfortunately people who hate stock options, like Warren Buffett, have their support.

June 11, 2002
Options Math
softwaretimes.com/files/options%20math.html

Denny Schlesinger

2 Likes

Don’t b surprised if Andy leff hits shop today or tomorrow.

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Yeah he already posted something on twitter about not wanting to go back and forth with shop management, his thesis still stands.

The Ottawa-based company’s net loss on an unadjusted basis was $9.4 million, or 9 cents per share in the quarter, compared to a loss of $9.1 million, or 11 cents per share, a year earlier.
better but not good enough. The company needs to start making money , or at least start coming closer faster. If they cut that at the same rate (2 cents per year) it will take 4.5 years to make money.

Nevertheless that 70+% revenue increase means a double every year compounded. 2 to 4 to 8 to 16 in 4 years. So in 4.5 years we have a profit on over 16 times revenue. If everything stays the same, which it won’t.

Can the company increase profits at will like Amazon? Would small increases in charges and less money spent getting new customers be easy? Can R&D expense for software be easily reduced if needed? Got me
I am a buyer at these prices. Which have wiped out my gains made from purchases at the Citron induced lows. So yesterday I was a winner compared to those who sold then, today I am not.

SHOP somehow has grown to be a too big position for me.

5 Likes

Wow! A rare Martian/Spock/et al sighting! :wink:

Good to see you!

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

SHOP somehow has grown to be a too big position for me.

Same, it’s now a massive position, but still expecting to profit pretty heavily off of the upswing, and then sell off some to put back into other stocks, just saw the most upside here.

The thing that is pretty crazy is the amount of collusion that it takes on the part of short-sellers to impact the stock price. Little retail shorts, and even some larger institutional short positions, don’t do much to move the stock price - because B&H investors are so ingrained to just buy the dip every time. It is when a large number of short-sellers in coordination target a specific stock that they all can drive the price down and profit more. This type of collusion is illegal in the business and retail worlds, why it is permissible in stock markets I’ll never know.

It’s impossible to know for sure, but I think there were just a lot of traders who took positions after the Citron fall, hoping for a quick rise and who are selling today because they want out of their position to move on to the next trade as this one has run its course (not for as much as they could have yesterday of course). Most are probably still up on their positions selling at 100. Yes there is the possibility that maybe it gets an upgrade tomorrow, balanced by the possibility that Citron tries again. I don’t see a reason to think there is some sort of collusion by shorts going on-the stock is steeply valued and a momentum play.

The knock against AMZN for years was they were never making any money. Money was being re-invested in the company. The bears would point that out and those that believed in the AMZN thesis have been richly rewarded.

I feel like this is the same story.

By the way, I have seen this recommended as a crypto currency play.

Thoughts?

"The online marketplace reports that its operating loss for the third quarter of the year was $12.7 million. Shopify Inc (US) notes that this is larger than its operating loss of $9.5 million from the same time last year, which was likely behind some of the drop for SHOP stock today.

During the third quarter of 2017, Shopify Inc (US) reported a net loss of $9.38 million. This is a larger net loss than the $9.12 million that was reported in the same period of the year prior and wasn’t good news for SHOP stock."

More revenue, but increasing operating losses.

The knock against AMZN for years was they were never making any money. Money was being re-invested in the company.

Amazon turned a profit many years ago before deciding to re-invest heavily in the business.

Back in Q4 of 2003, they made a profit of $125m net of one-time charges, $73m incl charges. And were profitable for the full year.

Sales were just under $2Bn/4th Qtr already, a far cry from $171m. And they were still growing at 36%.

12 Likes

Here’s the link to the call transcript

https://finance.yahoo.com/news/edited-transcript-shop-earnin…

1 Like