What happened?
Shopify (SHOP -8.38%), the stock was not a favorite item among investors on Thursday. Shares of the e-commerce intermediary suffered a more than 8% plunge on the day. This came amid yet another price cut by analysts and talk that the company could be on the lookout for an expensive takeover soon.
so what
Of those two factors, it’s likely that the takeover rumors moved the stock price more. In an article updated Wednesday afternoon, Bloomberg wrote that Shopify is in talks to buy a tech start-up called Deliverr, which, as the name suggests, helps e-commerce companies get their products to consumers quickly.
Image source: Getty Images.
Citing “people familiar with the matter,” the financial news outlet said such a deal could net privately-held Deliverr a price tag of more than $2 billion.
Neither Shopify nor Deliverr have responded to the article yet. Right now, Shopify’s market cap is over $60 billion, while at the end of last year it held just under $7.8 billion in cash and short-term investments.
What now
Meanwhile, Roth Capital analyst Darren Aftahi has significantly reduced his target price on Shopify stock. It brought its level down to $625 per share, quite a distance from the previous $850. He maintained his neutral recommendation.
Aftahi cited the results of a Roth Capital survey showing that Shopify’s earnings should be broadly in line with broad analyst expectations. He also thinks the stock is fairly valued at current levels, writing, “We’ll see [Shopify] as best-of-breed in our field, but it’s a multiple in this macro[economic] Background remains top-class.”
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