Online investment newsletter Citron Research says that the stock price and merchant base of Shopify will likely be affected by the Facebook profile harvesting scam. Citron has been one of the most vocal critics of Shopify and it remains to be seen how this latest comment will affect the e-commerce platform’s stock especially following the Facebook scandal.
Shopify is one of the more popular e-commerce solutions for budding entrepreneurs. It can be seamlessly integrated into Facebook pages. Customers can browse items from these pages prior to check out through Shopify.
Citron comments after Facebook scandal
According to Citron, Facebook has to scale back on personal information it shares with the Canada-based e-commerce platform. It also says that Shopify will find it harder to get new online sellers on Facebook. The investment authority also noted that shares of Shopify would likely trade down 29% lower in the weeks to come.
Shopify’s stock did slide by 4% in March although it pales in comparison to the 14% decline that Facebook stock experienced. Experts say that Citron’s comments hold some water as majority of the Shopify merchants are budding entrepreneurs who are the usual target of aggressive and conceivably bogus affiliate marketers.
Shopify has also been hit for being a haven for novice merchants, although the e-commerce platform still raked in an impressive $9.1 billion in gross merchandise during the last quarter of 2017.
Shopify and the Facebook scandal
However, that volume may be affected with Facebook’s latest crackdown on data mining and advertisers. There is also the possibility that Shopify will be affected by the #deletefacebook campaign. The ecommerce platform, after all, generates much of its revenue from merchant subscriptions and merchant solutions.
Last year, Shopify responded to Citron’s comments. The latter also fired back but the stock performance of Shopify in the last five months indicates which firm won that round. Now it remains to be seen how Shopify will perform this year, although it needs some help from Mark Zuckerberg’s creation in order to bounce back.