TLDR; There is a massive shift to E-commerce under way across all demographics, and especially under boomers and older people who have resisted online buying. With the spread of the virus, these demographics are shifting to online buying, expanding the market by 50%. Younger people ordering online are doing it even more. The sector will see long term extreme growth. Sales profits will consolidate under SHOP and AMZN. SHOP will double.
Basically right now, as stocks recover, we are going to see a fundamental repricing of companies. Some will be worth more and some worth less, as the economy and the way that people buy and communicate changes. The post pandemic economy will be different, understanding this is where the huge economic opportunity lays. Online sales profits will moon, and the profits consolidate under AMZN and SHOP.
Shopify is poised to see massive growth as a result. They were already booming, with their previous ATH at 593, they sit at 590 right now. The stock was already on a massive bull run with SHOP before this shift to online buying. With the addressable market for ecommerce effectively doubling over night, SHOP is STILL underpriced.
How do I know this? AMZN did not start to boom on this until recently announcing they were hiring 100k employees, and then 75k more. This sent their stock booming last week. The market had not priced that in until literally LAST week. It’s still early on these stocks.
SHOP is basically an index for ecommerce. Going forward, holding shopify is like holding an index on small and medium size businesses selling online. They have extremely low capital requirements, can scale basically immediately as they hold no merchandise, get a cut of every transaction. This is a dream stock.
“As we help thousands of businesses to move online, our platform is now handling Black Friday level traffic every day!
It won’t be long before traffic has doubled or more.” Shopify CTO – twitter.com/jmwind/status/1250816681024331777
Offhand comments from hacker news:
“I am presently scaling a client on Shopify who started at a 30k a month ad budget. Today we scaled past $8,000 per day (So a little under 250k a month). I fully expect and we’ll hit $500,000 a month in ad spend for them monthly probably in the next 2 weeks. The combination of increased screen time and major companies pulling ad dollars has cratered media prices, and in the process, created a once in a decade opportunity for DTC brands that have cash on hand and are ready to scale up production. This announcement from Shopify themselves surprises me not at all.”
“Same here. We have provide a warehouse management system specifically for e-commerce warehouses, as SaaS. We are (one of) the biggest player in the Netherlands, and since “social distancing” started here 4 weeks ago we see Black Friday 2019 levels of orders every day, for 4 weeks straight now. We have some customers that saw there orders come to a stop, even a few bankruptcies already. But almost all see a 30-40% bigger order flow. Some customers that sell DIY hair products see a doubling or tripling in orders per day and revenue. When I talk to the biggest e-commerce players in the Netherlands and the top 3 parcel shippers, they all see (near) black friday levels of orders/shipments.”
Taken from: news.ycombinator.com/item?id=22901231
The best part is it doesn’t matter if the virus wrecks the economy, sales and profits will consolidate under AMZN and SHOP.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.