Shopify to raise US$1.55B in latest share offering

Shopify sign
Shopify CEO Tobi Lütke. File photo

As it continues to cash in on the pandemic-fuelled e-commerce boom, Shopify says it plans to sell about US$1.55 billion worth of stock to fund its growth efforts.

The Ottawa-based e-commerce giant, which supplanted RBC as Canada’s most valuable publicly traded firm last year, said Tuesday it will offer 1.18 million class-A subordinate voting shares at a price of US$1,315 per share. The offering will be led by Citigroup, Credit Suisse and Goldman Sachs and is expected to close on Thursday.

Shopify said it could raise an additional $233 million if the underwriters exercise their option to buy another 177,000 shares.

It’s the third time in less than a year the company has raised a hefty sum through issuing stock. Shopify’s total haul from the issuances is expected to exceed $4 billion once the latest offering is taken into account.

The move comes on the heels of another impressive earnings report from Shopify, which has posted back-to-back quarterly profits for the first time in its history. 

$6B financial warchest

The company, which keeps its books in U.S. dollars, said last week it turned a profit of $123.9 million in the fourth quarter of fiscal 2020 on revenues of $977.7 million. Shopify ended the year with a financial warchest of more than $6 billion in cash equivalents and securities, up $3.5 billion from 12 months earlier.

In a news release Tuesday, Shopify said it will use the cash influx from its latest offering to beef up its balance sheet and provide “flexibility to fund its growth strategies.”

During a conference call with analysts last week, executives said the company plans to launch an “ambitious hiring campaign” for engineers to boost its R&D capabilities, adding Shopify also expects to add to its sales and marketing teams as it expands its product offerings and pushes into new international markets.

Shopify said it also plans to try to keep shoppers and merchants hooked by pouring money into strengthening its delivery fulfilment network and targeting international brands that would benefit from e-commerce.

Shopify’s shares ended the day Tuesday down six per cent to $1,637.26 on the Toronto Stock Exchange.