…And Why It Will Never Beat Amazon.


Do you own or have you ever owned shares in Shopify?

John O’Connell was asked countless times the last several years by clients and non-clients whether he owned the stock of the e-commerce company.

And when he always answered no, he was asked why not?

The chart above is why not.

The questions have stopped.

We’ll skip quickly through Shopify’s history because it’s well-known.

The upstart that makes it easy for companies to sell their wares online was a hugely successful Canadian story.

The stock, fuelled by an easy monetary environment and investor enthusiasm, surged nearly 6,000 per cent from 2015 to November 2021 to become the largest company in Canada by market cap.

Then, Shopify joined Nortel, Blackberry, and Biovail as companies cursed by being the largest non-bank company in the country.

It never ends well.

Shopify is down nearly 80 per cent from its peak and could still fall a lot more.

O’Connell is not beating his chest or enjoying any schadenfreude at investors’ expense.

But he had his reasons for never owning the stock.

And he has some definite ideas about why Shopify’s business model is flawed and easily copied.

Here are his views on Shopify’s fall from grace and why it will never be able to beat Amazon.

Image: Business Insider


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