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Did Shopify Stock Insider Buying Mark the Low?

SHOP stock - Did Shopify Stock Insider Buying Mark the Low?

Source: Burdun Iliya /

It’s been an abysmal stretch for Shopify (NYSE:SHOP). Not long ago, SHOP stock was hitting new all-time highs in November 2021. In the six months since, though, shares have declined each month — averaging a decline of more than 20% (inclusive of this month so far but not today’s rally).

In all, SHOP stock has suffered a near-80% drop from the highs and is down at almost 75% year-to-date (YTD). It’s been a catastrophe and that may not even be enough to describe it. But could insider buying come close to marking the low?

Despite Shopify’s rough road, that hasn’t deterred its management team from buying the dip. The stock got some good news when Shopify CEO Tobi Lutke tweeted his intentions to buy $10 million worth of Shopify stock. Specifically, he said:

“Totally agreed on this being a market over rotation. I just placed a $10m order for $SHOP stock myself.”

Additionally, Lutke is not the only insider buying either. Vice President Kaz Nejatian is also a buyer, as he tweeted on Wednesday: “This morning, I liquidated some of my family’s portfolio and bought a significant amount of $SHOP and for the first time ever talked to our team at Shopify about the stock price.”

Moreover, the company is fresh off an earnings report on May 5, where it delivered a top- and bottom-line miss. Earnings of 20 cents a share missed expectations of 63 cents per share, while revenue of $1.2 billion missed estimates of $1.24 billion.

Coming into Thursday’s session, SHOP stock was down 35% since reporting earnings. However, at some point, enough will be enough. But when will that point come?

Daily chart of SHOP stock
Click to Enlarge
Source: Chart courtesy of TrendSpider

Perhaps it’s now. The stock tagged new 52-week lows on Thursday at $308.31. However, it’s now up almost 8% on the session. Today’s low came within a stone’s throw of the Covid-19 low at $305.30.

Anyone who was waiting for that test may be extremely disappointed. That said, we’re still in a massive downtrend. Test No. 1 for SHOP stock will be clearing the declining 10-day. If it can do that and regain $400, it could put $500-plus in play along with the declining 50-day moving average.

Let’s see if it can build on today’s momentum.

On the date of publication, Bret Kenwell held a long position in SHOP. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Article printed from InvestorPlace Media,

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