RE:This is Real Life Demo of Trying to Catch a Falling KnifeGood points...
While over the years I would describe myself as an investor that bases decisions on fundamentals, I do look at technical indicators to see what they say in regard to the fundamentals. In the case of SHOP, from a technical point of view there is really nothing supporting the price until it hits somewhere around $415 a share and even then this support level is 3 years old and is of questionable value.
The other question I have regarding SHOP is their purchase of Delivrr for 2.1 billion. While I understand the need for a "fullfillment" strategy to compete with the likes of AMZN and WMT, it seems to me to be an expensive way to do it and with uncertain results. Are there other options to achieve the same result at lower risk and at a lower cost? SHOP management obviously thinks not. Does The Street share that view? From the SP action, it would seem the answer is no.
I am by no means an expert in such matters regarding supply chain and gladly defer to those with more expertise. That said, from experience in the investing world over the decades and seeing what others have done in the past it would seem to me that some sort of partnership agreement with Delivrr would have gotten a more favourable response by the investment community since the risk and capital outlays would have been much lower and such an agreement would not preclude a purchase later.
I also don't know the makeup of the businesses that SHOP services. One of my sons is a small business owner and is a SHOP client. I asked him about whether the the purchase of DELIVRR would make any difference to his business and his response was "Nope". Is he typical? Who knows?