I know some of you have sold or trimmed SHOP this week. I’m not sure why you’d sell your SHOP shares now, after they’ve dropped 20% from the recent high, but good luck to you anyway.
And I wish you the best, Bear.
My choice to sell now is due to what I see as a possible short-term opportunity. With my largest position has made 5-figure gains in just a few months, with me thinking that the stock has been over-valued for most of that period, I chose to protect some gains short-term.
As mentioned earlier, I haven’t been very active in watching my companies lately. If I would have seen Citron’s report earlier, I would have probably sold considerably sooner. Before you ask why (good question by the way) I’ll tell you now: I believe that SHOP is seriously over-valued even after the drop. Factor in anything you want including ginormous growth and the price is still hard to justify IMO. I’ve been expecting someone to come up with a “Citron play” for some time, and here it is.
None of this means I am giving up on the company, think its prospects are less than previous, or anything to do with the long-term quality of the company. Quite the contrary, I think it is firing on all cylinders and the CEO is doing a near-perfect job from what I can tell.
Along the lines of confirmation bias (a very real and powerful market force not to be doubted IMO) it would behoove all of us to maybe revisit the share count. There has been a shortage of float since i first bought SHOP. So much so that they had to issue shares to be included in some rather minor indices of the market. It’s no secret (here at least) that SHOP’s model is on target to become the de facto gold standard for e-commerce web hosting, making the demand for shares, probably not unprecedented, but at least a very strong checkpoint not to be forgotten.
I am strongly in the camp of the belief of David Gardner that the share price is almost never too high with super-growth stocks. The key word to me is ALMOST. SHOP’s valuation by my calculations, had crossed the line long ago and was susceptible to any strike from the likes of a Citron. That still doesn’t mean I give up. But if I can save 10-25% by trading shares out and then back in again, I will be satisfied, still own SHOP and be 10-25% wealthier. I fail to see the difference between that and buying options to enhance gains, or trading shares of any one of our holdings. I suspect you’ve done the same in other stocks, but for some reason we (yes, I include myself) seem to have somehow come to believe that SHOP is so great that it is impervious not only to e-commerce trends and consumer whims, but also to market forces that, lest we forget, require owners to race the slalom course through a daunting condition with a very limited number of shares for sale.
I value your opinion, always. But chastising anyone for doing what they think is in their best interests while investing does not become us. Mind you I don’t care for myself because if I reach my own personal goals I don’t care what anyone thinks of my actions. But I also realize that when I am in a small minority with my choices I can easily be proven wrong in the future. Wouldn’t be the first time; wouldn’t be the last. No big deal for sure and to be sure I value your opinion either way.
Please consider a couple of things:
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If this discussion were about any other stock except maybe NVDA … say perhaps, oh … TLND? … there would be one good discussion in 1 thread, no animosity and very little consternation. Maybe it wouldn’t hurt any/each of us to ask ourselves, “Why?” and, “What’s the difference?”
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We have covered the issue from most, if not all, applicable angles. Maybe further discussion should not be of an emotional nature, but I am not referee and don’t want to be. Proceed as you wish.
In my opinion SHOP has become such a magnet for extremes, pro- and con- ownership, that it seems to have become almost a personal issue, and that I fear, is a mistake. The scope of our decisions here has the same consequences as for any other stock. It may impact our own investing success to a certain extent (although in my case at least, re-buying at some point will, I expect, place a strong floor on any loss of portfolio growth) but to other investors here, the scope of any single person’s decision to sell or trade SHOP shares, will have no effect on the other investors here whatsoever. In other words, the scope of these discussions, while semi-critical to individuals, is negligible to the board in general, and Citron is not worthy of causing so much stress and uncertainty. As it should be. I wonder, do you agree?
As always, I wish everyone here great success. And I am always interested in well-reasoned discussion of any company or any stock. But when it comes to emotional issues, which I judge this is becoming, I prefer, although I’m certainly no poster child for logical, completely unemotional discussion myself) not to be involved in that emotional side. Even while not always being successful in this regard, I find it a worthy goal and just as profitable as picking good stocks to own.
In the end, I hope you are right. I hope the price rises from here. I dislike the idea of Citron being successful in his attempt at bombing SHOP shares, almost as much as I dislike losing opportunity for investing gains for my holdings. That would also render my limit sell order moot.
Dan
ps: My limit price has not been met. I am still a SHOP owner. Regardless of whether it is ever met, I am still a SHOP believer. I love what the company has done. But I refuse to love any stock, and right or wrong, the practice has served me well so far.
Relative , not absolute. The only time most of these Saul stocks will be an absolute bargain is the bottom of the next Bear Market.