C-Suite Transitions – Management Shakeups At Shopify and Peloton

There was a significant increase in C-Suite transitions last week.

Shopify (SHOP)

Tobias Lütke and Scott Lake created Shopify (SHOP) a global Canadian e-commerce business, in 2006 after failing to launch Snowdevil, an online store for snowboarding gear. Lütke, a computer programmer, decided to create his own e-commerce platform for the internet business because the available e-commerce platforms weren’t good enough. Snowdevil was released after two months of development.

Shopify merchants have the ability to choose a theme and create an online  store front using Shopify’s software. The app also allows merchants to add details about their products, upload images and organize inventory. Shopify’s technology has been used by well known brands like Vera Bradley (VRA), Kylie Cosmetics and Allbirds (BIRD) to sell directly to consumers. Merchants are charged a monthly fee and Shopify takes a percentage of every transaction on its platform. According to The Wall Street Journal, Shopify’s revenue nearly doubled to $714.3 million in the second quarter of 2020 as the number of new stores created on Shopify increased 71% compared with the previous quarter.

During the pandemic Shopify almost tripled its market cap, and the stock is now back to pre-pandemic levels as you can see from the five year chart below. Like most high growth technology companies, Shopify was unprofitable for several years before the pandemic but the huge spike in revenue during the last two years helped the company post operating profits in 2020 and 2021.

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