Shopify stock which has trended downward since last November received a positive endorsement on September 6, Tuesday. Generation Investment Management, co-founded by former vice president Al Gore, made a big bet on Shopify. As per data from Whale Wisdom, the firm owns 7.5 million shares of SHOP worth approximately $234 million. Generation Investment Management manages over $36 billion in assets as of March 31.
The news gave SHOP stock a lift, however, it dipped again. This was basically due to general market volatility that pushed down both Nasdaq and New York Stock Exchange. SHOP stock split in June and over the past six months, shares plummeted around 50 percent. Besides SHOP, Generation Investment made a significant investment in Microsoft as well. The investment is likely to act as a catalyst for both firms.
[Shopify] continues to invest in tools that would attract more merchants to its platform over the long term. This includes the Shopify Fulfillment Network (SFN), Shopify Payments, Shopify Editions and Shopify Markets.
Sirisha Bhogaraju, InvestorPlace
Here’s What Investors Can Expect
Growth stocks have been struggling throughout this year. The plight isn’t yet over. Rising interest rates and inflation has caused macroeconomic headwinds which continue to persist. As a result, SHOP has failed to gain momentum, especially since the stock split. This has made some investors turn their backs on the e-commerce giant and aim at other tech stocks.
Having said that, Shopify’s turnaround is due and that’s what Generation Investment Management’s fresh bet signals. AI Gore’s company isn’t alone in taking a bullish stance on SHOP stock. InvestorPlace’s Luke Lango recently conducted a stage analysis of stocks with SHOP as an example. The analyst believes that SHOP has finished its “Stage 4” decline and is likely due for a breakout soon
Sirisha Bhogaraju, InvestorPlace contributor, is also hopeful of Shopify’s growth despite the ongoing downward trend. “[Shopify] continues to invest in tools that would attract more merchants to its platform over the long term. This includes the Shopify Fulfillment Network (SFN), Shopify Payments, Shopify Editions and Shopify Markets,” she said.
These factors might have encouraged Generation Investment Management to invest in Shopify. One should also note that the firm’s focus is mainly on environmental, social and governance (ESG), hence, it seems to be impressed with Shopify.
About Generation Investment Management
Generation Investment Management was established in 2004 with offices in San Francisco and London. The firm claims to represent people from over 20 countries in its team. “Since its founding in 2004, Generation has played a pioneering role in the development of sustainable and environmental, social and governance (ESG) investing,” it states on the official website.
The firm boasts of building a global research platform to bring together sustainability research and fundamental financial analysis.
“Generation’s investment approach is based on our conviction that sustainability risks and opportunities directly affect long-term business profitability. We believe the interests of shareholders, over time, will be best served by companies that maximise their financial return by strategically managing their economic, social and environmental performance,” the firm says in its About Us on Linkedln.
About AI Gore
Albert Arnold Gore Jr. is a politician, businessman and environmentalist based in the United States. Born on March 31, 1948, he also served as the 45th vice president of the United States under the presidentship of Bill Clinton from 1993-2002. In the 2001 presidential election, he was a Democratic nominee. However, he lost to George W. Bush.
Gore was also awarded Nobel Peace Price in 2007 along with Intergovernmental Panel on Climate Change (IPCC) “for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change.”
Disclaimer: This is not an advice or opinion on investment. Users must take caution before investing.
