The Ottawa-based e-commerce platform announced after Thursday’s closing bell that it was issuing 1.85 million subordinate voting shares in an offer led by Citigroup and Credit Suisse. According to the Shopify press release, the underwriters have obtained an over-allotment option that could increase the size of the share sale by 15%.
Shopify said the product will be used to “strengthen its balance sheet, thus providing the flexibility to finance its growth strategies”. Price information was not immediately disclosed with the business plan. Bloomberg News said a discount of up to 5% was available to potential buyers.
At the close of trading on Thursday, Shopify’s market valuation was $ 119.17 billion, compared to $ 119.87 billion for RBC.
The quick decision to cash in on the meteoric rise in action should come as no surprise, says prominent Bay Streeter.
“If I was sitting last night thinking about the price of Shopify, I would have said to myself that they should issue shares at this price because if other people give them such a crazy rating, why not take some money and put it on your balance sheet at a time when your balance sheet cash is a very precious thing, “said Som Seif, chief executive officer of Purpose Investments, in an interview with BNN Bloomberg shortly after the sale of actions.
“We don’t know how this crisis, or pandemic, is going to evolve and that only gives them great strength,” he added. ” [I] think it’s a big step on their part. “