Shopify's stock erases all pandemic gains
Shares of e-commerce company Shopify dropped over 16% in trading Tuesday after the company cut 10% of its workforce, pushing its stock below its lowest pandemic-era closing pricing.
Why it matters: Many companies thought the pandemic would accelerate certain digital trends, including e-commerce and fintech. That turned out to be more wishful thinking than previously was thought.
Driving the news: In a somber letter to employees, Shopify CEO Tobi Lütke offered a mea culpa for making that gamble.
- "We bet that the channel mix — the share of dollars that travel through ecommerce rather than physical retail — would permanently leap ahead by 5 or even 10 years," he wrote.
- "It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point.""