Shopify IPO: The One Billion Dollar Question

On April 14, 2015, Shopify Inc., an e-commerce software provider founded in 2006, revealed its intentions to go public. The Shopify initial public offering (IPO) is expected to raise $100 million and list the company’s stock under the ticker symbol “SHOP” on the New York Stock Exchange (NYSE).

The Shopify IPO, in the $15.00-per-share range, values the company at $1 billion. Given the stiff competition from established industry players, should investors buy in?

Shopify IPO: The Competition

What differentiates Shopify is that it combines all parts of an online merchant account, including a shopping cart and payment gateway, into one easy-to-use solution. Setting up an online storefront has never been easier. But Shopify isn’t the only e-commerce platform and software provider in town.

Lots of names come to mind: e-commerce software provided by Square Inc., Etsy Inc.(NASDAQ/ETSY), Amazon.com Inc. (NASDAQ/AMZN), eBay Inc. (NASDAQ/EBAY), e-commerce software from Wix.com Ltd. (NASDAQ/WIX), e-commerce services provided by GoDaddy Inc.(NYSE/GDDY), and even the retail platform of Alibaba Group Holding Limited (NYSE/BABA) for internationally focused merchants.

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