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The Shopify IPO was one of the most highly anticipated stock market events in recent years. Since its initial public offering (IPO) at $17 per share, investors have been eagerly watching to see how this ecommerce giant would fare on Wall Street.
In this blog post, we’ll take a deep dive into the details surrounding Shopify’s IPO price and explore what has influenced its performance since then.
What was Shopify’s IPO price?
At the beginning of 2022, Shopify’s shares were trading at over $1,300 per share. To make it more attractive for smaller investors again, they decided to split the stock 10:1. That means the equivalent IPO share price would have been $1.70.
Stock Performance Since IPO: After going public in 2015, Shopify’s stock price has steadily risen over the years due to strong growth in revenue and profits. In 2016 alone, the company’s stock doubled, making it one of the best performing stocks that year.
Shopify has seen strong performance since its initial public offering, and as of December 2022, the company boasts a market capitalization of approximately $49 billion. This makes it one of Canada’s most valuable companies.
Overview of Shopify’s Business Model
Shopify is a leading ecommerce platform that provides businesses with the tools they need to create and manage an online store. As our Shopify review shows, the company offers a range of services and products, including website building tools, payment processing solutions, inventory management systems, shipping options, customer service support, marketing features and more. Shopify also provides its customers with access to over 100 third-party apps for additional functionality.
Target Markets and Customers: Shopify primarily serves small businesses who are looking for an easy way to set up an online presence without having to invest in expensive web development costs. However, it has become increasingly popular among larger companies due to its scalability – allowing them to easily expand their operations as needed without having to switch platforms. Shopify’s market share currently stands at around 30% of all ecommerce websites in the US.
Revenue Model: Shopify generates revenue through subscription fees charged on monthly plans ranging from $29 to $299 /month, depending on the number of features required by each user’s business needs. There is also the enterprise-level Shopify Plus plan that starts at $2000 /month. Additionally, Shopify earns money through transaction fees (2% – 2.9%) when customers use certain payment gateways like PayPal, Stripe or their own payment gateway Shopify Payments.
There’s also revenue coming from app purchases made within the platform itself (app developers pay a 20% commission fee).
Shopify mainly competes against players like WooCommerce, Magento, Wix, BigCommerce and Squarespace (find more Shopify alternatives here). WooCommerce currently powers more stores than Shopify and could potentially increase its market share even further since it’s an open-source software that is essentially free.
But there is also pressure coming from the lower end of the market, mainly by rivals like Wix who are seeing ecommerce as their main path of expansion.
Firstly, the company reported lower-than-expected revenue growth for its Q4 2022 earnings report. This caused investors to become concerned about Shopify’s ability to maintain its current level of success going forward, which, in the years before, was mainly fueled by the COVID pandemic.
Finally, rising competition from other ecommerce platforms such as Amazon may also be contributing to Shopify’s declining stock price. All of these factors have caused investors to become wary of the company’s future prospects, leading to a decrease in its stock price.
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