Shopify shares fell 11% on Wednesday after Citron Research’s Andrew Left released a video questioning the legitimacy of their business practices. On Thursday, shares fell another 7%.
Left, a noted short-seller, claims that much of their customer base cannot be accounted for and labels the Ottawa-based company as unstable. Left alleges that much of the company's cliental are not legitimate businesses, but rather people who have been sold "business opportunities" built around reselling, which goes against Federal Trade Commission rules.
"They are not selling them to business owners," Left said of the websites. "They are selling them to people as opportunities to get rich quick. Shopify is a company that has mastered the good old get rich quick scheme.”
“This is not an $11-billion company," Left went on to say. "This needs to get completely looked at by the FTC and completely looked at by Wall Street."
On Thursday morning, Shopify posted a statement to their website, standing behind their mission and celebrating the success of those that use its system.
"Shopify's growing community of entrepreneurs includes makers, creators and innovators, from students trying to pay for school to merchants who have successfully scaled their businesses," the company said. "Shopify has always strived to take the path that leads to more entrepreneurs by designing its platform to remove the technical, operational, and financial barriers to enable anyone, anywhere, to build, grow, and scale a business."