Shopify’s 70 per cent stock market plunge isn’t out of the ordinary for the flailing tech sector, but it has managed to drag the Canadian stock market into the red this year.
The e-commerce hub has shed A$175 million in market value this year alone, bringing the Canadian market down 6 per cent in total, or 978 points.
Without its ‘input’, the market would only be 2 per cent down – making it one of the world’s top-performing equity benchmarks.
This echoes Blackberry’s 2008 drop, which pulled the index down more than 300 points.
Despite Shopify’s woes, Canadian stocks outperformed the (US) S&P 500 Index by more than 11 percentage points this year.
Shopify was forced to cut 1,000 jobs in July, roughly 10 per cent of its total workforce, after a rapid expansion didn’t yield the expected results.
“We bet that the channel mix — the share of dollars that travel through e-commerce rather than physical retail — would permanently leap ahead by five or even 10 years because of the pandemic,” CEO Tobi Lutke said.
“It’s now clear that bet didn’t pay off.”
