TORONTO, Canada — Shopify Inc. is taking advantage of record prices to sell shares and keep up its brisk pace of growth.
The Ottawa-based e-commerce company will sell 5.5 million shares from its treasury, adding about 7 percent to the number in circulation. That would raise about $490 million based on current prices. Its stock was down less than 1 percent to $89.26 at 1:10 p.m. in New York after dropping as much as 9.8 percent earlier, the steepest intra-day decline since January 2016. The shares closed at an all-time high on Tuesday.
Shopify shares have more than doubled since the beginning of the year — making it the best-performing Canadian company worth more than C$1 billion — as it keeps beating expectations for how fast it can grow users and revenue. However that’s proving expensive: the company has said it won’t make a profit until the end of 2017.
Money from the sale will be used to boost network infrastructure, bolster marketing and fund potential future acquisitions, Shopify’s head of investor relations, Katie Keita, said in an emailed reply.
“We’re growing quite rapidly,” Keita said. “This is a way to ensure we will be able to strengthen our balance sheet to fund various growth initiatives.”
Shopify’s major competitors are privately-held, and include Austin-based Bigcommerce Inc. and Campbell, California-based Magento Inc.
The deal follows a $329.9 million offering Shopify completed in August 2016. Shopify hired Morgan Stanley, Credit Suisse and CIBC Capital Markets to lead the new sale, the firm said in a statement Thursday. The company provides websites and payment services to merchants who want to sell online.
By Gerrit De Vynck, with assistance from Scott Deveau; editors: Jillian Ward, Jeanette Rodrigues and David Scanlan.