It’s About Time Shopify Had a Secondary Offering
Year to date, Shopify shares are up more than 140% and that makes this a prime time for a secondary offering. Shopify also has announced that it will be breaking into the cannabis industry as well.
Shopify Inc. (NYSE: SHOP | SHOP Price Prediction) has seen an incredible 2019 so far, even if shares have backed off over the past month. Year to date, shares are up 144%, and that makes this a prime time for a secondary offering. Shopify also has announced that it will be breaking into the cannabis industry as well.
The firm announced that it has priced a secondary offering of 1.9 million Class A subordinate voting shares at a price of $317.50 per share. Shopify expects to see gross proceeds from this offering of $603.25 million. Additionally, Shopify has granted underwriters an overallotment option to purchase up to an additional 15% of the shares.
Shopify expects to use the net proceeds from the offering to strengthen its balance sheet, providing flexibility to fund its growth strategies. Pending their use, Shopify intends to invest the net proceeds from the offering in short-term, investment-grade, interest-bearing instruments or hold them as cash.
Apart from the secondary offering, Shopify announced new features on its platform to help U.S. merchants sell hemp and hemp-derived cannabidiol (CBD) products online or in brick-and-mortar retail locations, where permitted by law. Starting today, U.S.-based retailers of all sizes can start and grow their businesses by selling select hemp or hemp-derived CBD products using the trusted commerce platform that powers more than 800,000 merchants globally.
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Harley Finkelstein, chief operating officer of Shopify, commented:
Shopify has unmatched expertise in emerging industries, along with the resources merchants need to be successful in the fast-growing market of hemp-derived CBD products in the U.S. Shopify’s reliable technology and extensive partner network means that businesses can ride the wave of demand for these products and give consumers more choice.
Shares of Shopify traded down nearly 2% to $332.03 Monday morning, in a 52-week range of $117.64 to $409.61. The consensus price target is $361.92.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
