now the #1 most valued company in CanadaYup, Shopify is now worth more than TD. It's now the second most valuable company in Canada, only behind RBC.
At the same time we're watching the "physical" economy collapse (oil prices are suggesting a Depression) perhaps we are witnessing a historic shift to the digital economy. Maybe Shopify emerging as a Canadian giant is an indication of this "paradigm shift"?
It's really hard to know if that's what's going on, because it could also be stupid overpricing of SHOP that is unjustified. But how exciting! Is this a paradigm shift and transformation of the economy, or just stupid mispricing?
Or it could be bits of both ... nothing says it has to be one or the other exclusively.... It's really hard to know if that's what's going on, because it could also be stupid overpricing of SHOP that is unjustified. But how exciting! Is this a paradigm shift and transformation of the economy, or just stupid mispricing?
Yes I'm old enough. I started investing around 2000 and was studying engineering at the time. Some friends of mine had internships at Nortel and people talked about the stock a lot. Some had bought NT shares, but I didn't.James.....are you old enough to have lived through Nortel and RIM? I suspect the different generations will have wildly different views on SHOP until proven otherwise.
I found my old Blackberry Bold in my cleanup today. Powered it up. It’s password locked and I can’t remember the password. Do these things even have wifi capability? I don’t recall wifi (outside of the house) even being discussed 10 years ago.Yes I'm old enough. I started investing around 2000 and was studying engineering at the time. Some friends of mine had internships at Nortel and people talked about the stock a lot. Some had bought NT shares, but I didn't.
RIM was even better since I lived in Waterloo during the crazy years. I watched the whole city transformed to RIM town... the parks, events, everything was RIM branded and funded. RIM actually funded the lab I worked in. My advisor was on RIM payroll and nearly everyone I knew worked there!
People wouldn't shut up about RIM and Blackberry and I was actually very relieved when the stock imploded and everyone stopped talking about it all the time.
But I think one should also be cautious about writing off a stock just because of a booming share price and value. AAPL and AMZN are two other instances, which for a long time, looked like stupid bubble stocks. Apple basically had a flashy, fashionable toy product (iPod and early iPhone) which many people bought due to the fad. I asked my girlfriend at the time why she wanted an iPhone and she giggled and said, "it looks cool and it's white". And there really is an Apple cult.
AMZN had no earnings for a very long time, and I even saw a PhD thesis trying to analyze what the deal is with AMZN. Nobody could make sense of the disconnect between their financial results and continuing stock trend.
AAPL or AMZN could have easily turned out to be dumb, momentum driven stocks. Today, market caps of AAPL and AMZN are $1.2 trillion and $1.3 trillion. In comparison, the largest bank stock JPM is barely worth $0.3 trillion.
FB is another example, which still seems like a stupid fad to me. The platform basically looks like a busy Myspace experience that's full of politics and junk advertising. I find it disgusting and most of my friends don't touch it. Who knows if it has lasting power?
So what I'm saying is that if you look at a group like AAPL, AMZN, FB, RIM, NT, SHOP -- it's very difficult to separate out which are transforming the world (the real deal) vs overvalued bubbles.
Recognizing which stock is dumb, and which is the real deal, is easy in hindsight. I don't think it's so clear in real-time. So the question remains... does SHOP really have a strong future in our new economy? I have no idea.
(Below: a Halloween costume after the RIM crash)
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it seems its hard to stock pick in tech until you’ve missed the boat. Better to buy a tech basket or index and see what happens....although people are doing it with Apple and amazon still and making money.I had a co-op term with Nortel. It was right at the peak. People were talking about whether to buy before or after stock splits. The plant I was working at got sold off to a third party manufacturer.
Once I graduated, I was offered a job with RIM that came with options. I didn't take the job because I didn't know anyone within 2 hours of Waterloo. Had I taken it and kept the options until the top, I would have been a multi millionaire before 30.
I like SHOP as a client, but it's hard to justify as an investor. There's really no moat for other companies to enter, unlike RIM and Nortel which had patents and technology. Some say Huawei is where they are because they stole everythign from Nortel, but that's another story.
Maybe SHOP manages to focus on costs and gets rid of the stock options and compensation and can start turning a profit. Even if they do make profit, I can't see it ever being high enough to justify a reasonable multiple. You could take a look at their number of paying clients and how much you'd have to raise fees to make a reasonable profit and justify a P/E of something like 40-50. I bet it's impossible.