- Shopify gives shareholders 10 shares for every 1 as of June 28.
- SHOP stock lost 6.1% on Tuesday in tandem with Nasdaq.
- Shopify stock is expected to open around $35.
Update: Shopify Inc. (NYSE: SHOP) extended its losing streak into the third straight day on Wednesday, resuming its correction from over one-week highs of $39.50. The stock price of SHOP slid 5.64% to end the day at $33.05, having hit a new five-day low of $32.47 earlier in the session. The share price of the Canadian e-commerce giant slipped after the completion of a 10-for-1 split of its common stock on Wednesday. The share split “will make ownership more accessible to all investors,” the company said in a statement before the stock split. SHOP has eroded roughly 75% of its value so far this year as e-commerce traffic slows and investors flee growth stocks, in the face of rising borrowing costs.
Shopify (SHOP) stock will complete its share split on Wednesday, June 29. SHOP shares that closed at $350.26 on Tuesday, should open at 1/10 the price near $35. The SHOP stock price sank a surprising 6.1% on Tuesday ahead of the split as growth stocks mostly tanked in tandem with the Nasdaq.
Read more stock market research
Shopify Stock News: SHOP could get energized from split
Shopify stock famously went on a tear through the heart of the pandemic. Trading as low as $332 in March 2020, SHOP stock then flew ever higher to $1,762 last fall. Then it sank all the way to $297 just two weeks ago before trading higher with the bear market rally. Shopify management is of course hoping that a share split will make it more suitable for retail investors who prefer lower per-share prices.
Amazon (AMZN) briefly saw a rally in its share price following their 20-for-1 split on June 6. Tesla is supposedly gearing up to seek a shareholder vote for a 3-for-1 stock split, while Google-parent Alphabet has scheduled a 20-for-1 stock split next month. It seems the age of over $1,000 mega-cap share prices is becoming a thing of the past.
Also read: Amazon Stock Deep Dive: AMZN price target at $106 with near-term risks offset by long-term growth
Just this past week Morgan Stanley analyst Keith Weiss reinitiated coverage of Shopify stock. He said that “risks around the macro sensitivity of small business, a normalization of e-commerce spending and limited transparency from management present near-term” uncertainty and that Shopify's new investment in an Amazon-stye fulfillment service should cut into margins for the time being. Still, Weiss gave SHOP a $450 price target and an equal-weight rating.
Last week, Shopify joined up with Twitter to allow Shopify merchants to sell directly to their Twitter followers. "Choose how you want to display your product: a smaller Shop Spotlight carousel under your bio or a more extensive Twitter Shop," Shopify said in a statement about the new strategy. The Shop Spotlight allows users to sell up to five products directly under their bio, and the Twitter Shop allows the showcasing of as many as 50 products.
Shopify Stock Forecast: Support area getting stronger
The demand zone between $298 and $308 ($29.80 to $30.80) for SHOP stock should continue to hold since it has done so on six occasions now. Every test of a support zone that does not fail makes it that much stronger.
The major problem is that SHOP has been stuck below $400 ($40) for nearly two months now. Breaking $40 from here on will signify that a rally is afoot. Breaking below $30 means there is more pain ahead.
SHOP daily chart
Previous updates
Update: SHOP was pressured into a support area on the 4-hour and 15 min charts near the lows of the day at $41.88. The price could be due for a bullish correction with the higher areas appealing in terms of price imbalance mitigation. The sell-off from $49 leaves an inefficiency in price between $47.02 and $47.70 on the hourly chart. The resistance on the hourly chart comes in just below $50.00. On the downside, the bears can eye $39.00 hourly lows.
Update: Shopify's 10-for-1 stock split failed to entice retail traders on Wednesday. Shares that closed at a split-adjusted price of $35.02 on Tuesday, opened at $34.40 and are now down 4% to $33.63 an hour into Wednesday's session. The Nasdaq is flat after starting the session down about half a percentage point. Megacap tech like Amazon (AMZN) and Apple (APPL) are ahead with both advancing near 2%.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.