This post isn't about SU, but the I found the message from SHOP's CEO and founder very interesting.
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On Tuesday, Mr. Lutke bought 29,617 shares and Toby Shannan, chief operating officer at Shopify, bought 2,959 shares – both at US$337.86 per share.
On Sunday, the company’s chief executive publicly expressed his frustration about analyst modelling, which he says is unreliable. “Is there a place where financial analysts track records are kept? People seem to pay attention to them but are they being held accountable?” Mr. Lutke tweeted to more than 250,000 followers.
“‘Company X,Y out-performed analyst expectation is just different framing form [sic] ‘analysts failed to accurately predict company X,Y,’” Ltke said. “Especially when it’s mostly macro economic factors that cause it. [Rising] tide raises all boats kinda stuff. That feels like analysts should really have that in their models.”
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7 SHOP execs announced that they have bought shares and why. The comments represents a landmark for SHOP as they have never commented before about the share price. In fact, the company doesn't offer guidance.
I expect the street responds negatively to Lutke's slap in the face. The street will blame SHOP for neglecting to offer guidance. In fact, the news reporters are already showing the street's bias in the articles that appeared today.
There's the pinch. I can tell you from first hand experience that analysts don't have time to dig deep into the companies that they follow. As a result, the game is fixed. By fixed, I mean that the CEO's of public companies spoon feed the analysts the information that they want to the analysts to think and write about. The companies get what they want, and analysts get their jobs done for them. Everybody wins. Well, not exactly everybody as the investors pay for the lack of effort put in by the analysts who don't bother (don't have time) to keep current.
Lutke is saying to the street: "do your job". The street will say "how can we do our job if you don't work with us" which is really just another way of saying "go f*** yourself as you know darn well that we don't have the time or manpower to do the job" that the the public thinks we are doing.
It will be interesting to see how the market reacts to SHOP tomorrow but it won't really mattter as the market is now 100% controlled by algos programmed by the story tellers