Shopify are pissed after Citron Research wiped $1.5 billion from its market value after criticizing Shopify’s marketing practices.
“We vigorously defend our business model and stand resolutely behind our mission and the success of our merchants,” Shopify said in a statement.
Stock fell after Citron founder Andrew Left accused Shopify over “overselling” the potential for customers to make money.
Shopify who have been around for 13years have been suffering falls in share value after Andrew Left tweeted, posted a 7min video (see below) and posted a report accusing Shopify of mastering “get rich quick” schemes and added that Shopify is “not the company Wall street has sold you”.
Shopify has been one of the best performing stock over the last year presenting it as an e-commerce site for small to medium sized businesses.
But Citron questions Shopify’s website & customer numbers which Shopify states is currently at 500,000.
Citron questions this as the number of clients Shopify has, sits at 2,500 “Plus” clients and maybe another 20,000 “Advanced”.
So who are the other 450,000 + websites?.
Andrew Left’s comments and report have resulted in Shopify shares falling radically as hype amongst the fintech and investor community grows.
It’s important to note though that Citron are a company known as “short sellers” which sell borrowed shares and buy them back at lower prices.
Andrew Left was found guilty by a Hong Kong Market Misconduct trial in 2012 for publishing “false and misleading” reports in 2012 about Chinese developer China Evergrande Group.
Left had made a profit of HK$1.7 million around $217K USD before issuing a scathing report on that company too.
“In all the circumstances, the Tribunal is satisfied that, when he published the Citron Report, Mr Left consciously disregarded the real risk that the report was false and/or misleading as to material facts. He was reckless in his conduct,” according to the justice’s judgement report issued on Friday.
The difference with this latest report is Citron is calling on the FTC to stop Shopify.
Full story up in one hour…video live now…$SHOP is not the company Wall Street has sold you. The FTC is going to shit when they read
— Citron Research (@CitronResearch) October 4, 2017