Shopify Stock News and Forecast: Bulls fail to SHOP after 10-for-1 stock split

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.

Clay Webster FXStreet

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.

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:

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

AUD/USD holds steady near 0.7200 amid escalating US-Iran tensions

AUD/USD consolidates just below its highest level since mid-May, touched on Friday, and hovers around 0.7200 at the start of a new week amid mixed cues. Hawkish RBA expectations continue to act as a tailwind for the Aussie. Meanwhile, the upbeat US NFP report lifted Fed rate hike bets, which, along with escalating US-Iran tensions, underpins the safe-haven US Dollar and caps the currency pair.

USD/JPY stays weak below 156.00 on aggressive hawkish BoJ repricing

USD/JPY stays in the red below 156.00 in the European session on Monday as aggressively hawkish BoJ repricing continues to drive the Japanese Yen higher. Meanwhile, the US Dollar faces headwinds from US debt worries and uncertainty about the Fed's policy outlook ahead of Friday's US CPI data release.

Gold sticks to losses as bears await acceptance below $4,400 amid Fed rate hike bets

Gold attracts some sellers for the second straight day, though it lacks follow-through, and hovers around the $4,400 mark heading into the European session. Moreover, the commodity holds above Friday's swing trough, touched in reaction to the upbeat US monthly employment details, warranting some caution for bearish traders before positioning for any further losses.

Bittensor: TAO eyes $300 amid launch on Raydium, parody meme coin, ChatGPT-6 Astra release

Bittensor is trading in the green on Monday, continuing a steady upward trend over the last five days, with a 25% gain. Social chatter surrounding Bittensor is increasing amid a similarly named meme coin launched on Solana and the release of ChatGPT-6 Astra. The technical outlook for TAO is bullish as momentum strengthens and buyers target the $300 breakout.

Strong US jobs, Middle East tensions and key inflation data ahead

Good morning all, hope you enjoyed your weekend. Markets are starting the week after Friday’s stronger-than-expected US jobs report, which increased expectations that the Fed could raise rates at its September meeting. However, US markets are closed today for the Labor Day holiday, so liquidity should be lower and we may see slower price action.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.