Interested in application software? If so, you might want to pay close attention to the following: On Tuesday, Shopify Inc. (NYSE:$SHOP) reported a better-than-expected jump in revenue and improved outlook, however, its shares still dropped as investors were taken back by its response to a short-seller’s attack.
The Canadian retail software company’s Q3 revenue increased 72% as it posted an adjusted profit for the first time as a public company and boosted its Q4 forecasts.
Regardless, Shopify Inc.’s shares dropped in early trading as the company looked to fend off criticism from Citron Research’s short-seller Andrew Left. Left has complained numerous times about payments to bloggers and anyone else who receives merchants to sign up to Shopify’s commerce platform. Additionally, Left has suggested that the United States Federal Trade Commission should investigate the company.
According to CEO Tobi Lutke, Shopify Inc.’s external legal counsel had dismissed Left’s claims as “preposterous.” He also disclosed that the company had not had any contact with the United States consumer watchdog since Left’s report reached its share price in early October.
“While the company went out of its way to address the short thesis that’s out there, the initial reaction from investors seems to suggest that they didn’t go far enough in their explanation,” Tom Forte said. Forte is an analyst with D.A Davidson.
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