The speed at which Shopify (SHOP.NYSE) saw a 119% price increase off the back of withdrawing their 2020 financial guidance on April 1st took us by surprise. While a short-term pullback is possible, Shopify is taking advantage of two material catalysts with clear timelines, which we discuss in our 52-slide Powerpoint Executive Summary pitch.
At the same time, valuation at US$750 per share requires investors to move away from a relative SaaS valuation thesis they may have had a few months ago and be comfortable with Shopify spending to grow into having a 2.8% market share of online small businesses using popular social media channels. The market can generally be defined by the number of small businesses using Facebook, Instagram, WhatsApp and Messenger today.
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