The Shopify (NYSE: SHOP) stock price has collapsed after the firm published weak earnings. The shares are trading at the lowest level since 2020, meaning that they have declined by more than 77% from their all-time high. Its market cap has dropped to just $54 billion.
Shopify earnings review
Shopify is one of the most important e-commerce companies in the world. The company provides tools that enable people to build their online shops without doing any coding.
Shopify, which is one of the companies in the Ark Innovation Fund, had a strong performance during the pandemic. This happened as the number of people creating online stores and those buying from e-commerce stores rose.
As a result, the Shopify stock price jumped to an all-time high of $1,823, valuing it at over $100 billion. Now, with the world economy reopening, investors have dumped lockdown stocks as growth has slowed.
In a statement, Shopify said that total revenue rose by 22% in Q1 to $1.2 billion. This was the highest quarterly revenue on record. Its monthly recurring revenue rose to $105.2 million from the previous $89 million. Subscription revenue rose by 8% to $344.8 million while the total Gross Merchandise Volume (GMV) rose to over $43.2 billion.
The Shopify stock price also declined after the company expanded its logistics business. In a statement, the company agreed to pay $2.1 billion to buy Deliverr, a company that provides fulfillment solutions. The company will be funded 80% in cash and the rest in shares.
Like Amazon, the company is struggling as inflation keeps rising. Recent data showed that the headline consumer price index (CPI) rose by 8% in the United States. The company is also finding
