High-Flying Shopify Stock Nosedives After Short Call

Shopify Inc. shares moved sharply lower after Citron Research – a publisher operated by the activist short seller Andrew Left – issued a bearish report on the stock. In the report, Mr. Left highlights the company’s affiliate partner program that promotes members becoming “millionaires.” He believes that these promotions are more brazen than the program of Herbalife Ltd., which eventually drew the attention of the Federal Trade Commission.

Baird analysts stepped in to defend Shopify stock following the report, saying that the comparison to Herbalife is not accurate. Baird said that a review of Shopify ads does not show many references to “becoming a millionaire” as Citron Research alleges. Many investors have also pointed out that Shopify operates an e-commerce platform for businesses and does not sell to consumers, which makes Herbalife an unfair comparison. (See also: Herbalife Sinks as FTC Regulation Stands to Thwart Growth.)

 

The momentum favorite fell more than 20 points in two sessions after short seller Andrew Left issued a bearish report. …read more

Read more here: High-Flying Shopify Stock Nosedives After Short Call

Category: SHOP

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