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The Flat View
When I spoke with Shopify CEO and founder Tobias Lütke earlier this month, I was the first to talk to him about an unfortunate headline that had just appeared: “Shopify is the next WeWork?” Lütke, whose name is Tobi, told me about a major launch of new features for the platform, which provides tools for retailers to digitally sell their goods directly to customers. He turned the company into an e-commerce giant a bit under the radar, fueling more than two million online stores, from literal mother and pop operations to Chipotle. You almost certainly used it without knowing it, as its brand is subtle. Its growth ended with the collective radar and, at the end of last year, the brilliant dome of the CEO full up adorned the cover of Bloomberg Business Weekwho baptized him as the Anti-Bezos.
But this year, 16-year-old Shopify hit a wall, thanks to supply chain shortages, a post-pandemic return to real stores, and an impending recession. Its shares closed and lost 73 percent of its value. Even the Bloomberg The writer, my former colleague Brad Stone, felt compelled to notice the irony, wondering if he had cursed Lütke with his lavish attention. The timing of all this was especially awkward, as Shopify was about to split its shares: 10 shares for each of them. This is not something that companies usually do when the price is going down. Another corporate maneuver that suddenly seemed questionable was Lütke’s plan to change the company’s rules for voting shares so that his control of the company was virtually impregnable. All this provoked Street asking this alarming question to its headline, which of course I mention to you during our talk.
“Oh, Jesus, I didn’t see it,” Lütke replies, his voice slightly accentuated by his German roots. (He moved to Canada at age 20, and the company was headquartered there until 2020, when he stated it would then be virtual.) Pause. “Yeah, okay, it’s fun,” he finally says, though he doesn’t laugh.
But he’s struggling and wants to talk about the new features Shopify is implementing to become even more influential in international trade. The fall in shares, he says, does not reflect the company’s performance or prospects. “We said that internally, over and over again, when stocks went up 50 percent, we weren’t 50 percent smarter at that time. So when it went down 50 percent, we didn’t go back more fools “. Presumably, even a 73 percent plunge does not indicate a lower IQ.
As for the increase in his voting shares, Lükte says he always intended to have minority control, and the current change is due to technical reasons, in part due to Canadian and US rules. . “It’s not really my vote,” he says. “This is a defensive mechanism against, such as, hostile acquisitions.” Not all shareholders were happy with this move, as the measure was pronounced with only a 54 percent majority. Lükte also points out that the new power ends with him and cannot be passed on to his successor.