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Last week, Shopify posted its slowest quarterly growth in seven years, adding to a global rout for e-commerce companies and deepening concerns about a pullback in consumer spending.Justin Tang/The Canadian Press

Executives at Shopify Inc. SHOP-T say the company’s beaten-up shares are a buy, and they’re putting their money where their mouth is.

In a series of tweets on Wednesday, several Shopify executives said they are purchasing shares to show their confidence in the company. They characterized the company’s sinking stock price as a case of market rotation, as investors are fleeing tech stocks.

Founder and chief executive officer Tobias Lutke stated that he placed an order for US$10-million in Shopify stock. “It’s time to build,” he tweeted.

Wednesday’s tweets are a rare occurrence for Shopify, and signal a distinct shift in the tone of communication from its leaders. The Ottawa-based e-commerce company has maintained a culture of not commenting on market activity. It was previously a matter of pride when Shopify executives would not talk publicly about its then soaring shares.

Kaz Nejatian, vice-president of merchant services at Shopify, said he talked to his team “for the first time ever” about the stock price on Wednesday. “I liquidated some of my family’s portfolio and bought a significant amount of $SHOP,” Mr. Nejatian tweeted, sharing a screenshot of a note he sent to his team.

In his note, Mr. Nejatian described analysts as “stock pickers” and told his team that they could prove them wrong. “When everyone else has sought reward from safety, we have sought reward from serving others and from taking risks. And every year, we have gotten better and better at taking bigger risks and serving more people,” he wrote.

The price of Shopify’s stock has sunk almost 80 per cent since its late 2021 peak. Two years ago, Shopify stock traded for about $500 a share on the Toronto Stock Exchange. It went on to more than quadruple in price, hitting a record high of $2,228.73 late last year, before the bottom fell out. Shares closed at $414.41 Wednesday, down more than five per cent from Tuesday.

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Last week, Shopify posted its slowest quarterly growth in seven years, adding to a global rout for e-commerce companies and deepening concerns about a pullback in consumer spending. Those results missed analysts’ projections on a number of points – including earnings, revenue and gross merchandise volume.

Harley Finkelstein, president of the company, tweeted on Wednesday that he was “putting my money where my mouth is & purchasing more Shopify shares.” According to the System for Electronic Disclosure by Insiders, or SEDI, which provides data about major shareholders in public companies, Mr. Finkelstein had not made any acquisitions in the public market for Shopify prior to this week.

Mr. Finkelstein bought 2,959 subordinate shares on Tuesday at US$337.86 per share. Data from the SEDI shows that before this, Mr. Finkelstein held only 94 shares of Shopify, typically exercising options and then selling the underlying stock. General counsel Jessica Hertz also purchased 147 shares on Tuesday, but before that, she owned zero shares (not including restricted stock units).

Also on Tuesday, Mr. Lutke bought 29,617 shares and Toby Shannan, chief operating officer at Shopify, bought 2,959 shares – both at US$337.86 per share.

On Sunday, the company’s chief executive publicly expressed his frustration about analyst modelling, which he says is unreliable. “Is there a place where financial analysts track records are kept? People seem to pay attention to them but are they being held accountable?” Mr. Lutke tweeted to more than 250,000 followers.

“ ’Company X,Y out-performed analyst expectation’ is just different framing from ‘analysts failed to accurately predict company X,Y,’ ” Mr. Lutke wrote. “Especially when it’s mostly macro economic factors that cause it. Raising tide raises all boats kinda stuff. That feels like analysts should really have that in their models.”

Dan Romanoff, a Chicago-based senior analyst of e-commerce and software companies at Morningstar Inc., said it is usually a “best practice” for executives to not talk about their company’s share price publicly, but he sees how a positive message from Mr. Lutke “to rally the troops a little bit” could be constructive for Shopify.

“I mean this respectfully, and more in a complimentary fashion, but it’s not obvious he understands the role of a sell-side analyst,” Mr. Romanoff said Wednesday of Mr. Lutke.

“I saw Tobi made a few comments a couple days ago about the analyst community and my mental reaction to them was that SHOP doesn’t provide guidance, which doesn’t help. Nobody understands the business more than him, so his thoughts on what the next quarter and year have in store would help calibrate investor expectations.”

With reports from Sean Silcoff

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