Shares of Shopify Inc slid 16% on Thursday after the Canadian tech giant's weak forecast for first-quarter revenue and higher cost projections amplified investor concerns over aggressive investments in an economy facing slowing growth.
Pandemic-related disruptions propelled the company to briefly become Canada's most valuable firm before online demand eased as economies reopened and forced it to launch new products, boost investments and focus on social media integration.
Such investments and Wednesday's warning on macro-challenges have spooked investors concerned about profitability. Oppenheimer analyst Ken Wong said he was worried about Shopify's "noncommittal spend" and an operating loss projection of about $85 million that could dampen investors' expectations for profitable growth this year.
"Our outlook reflects the prudence that we think is necessary in this macro environment," company president Harley Finkelstein said in an interview on Thursday.
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