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Shopify, not Walmart, is the threat to Amazon's reign as king of e-commerce

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There aren't many credible threats to Amazon's reign as the king of e-commerce. Shopify, however, is a very legitimate one. Last year, it crushed earnings expectations and doubled its revenues... again. So why is its stock trending down? It's simple! In 2020, Shopify set records as the whole world shifted to eCommerce. These numbers will be hard to reach in 2021 and many investors are and will likely have a hard time accepting negative YoY growth rate and hence the stock is taking a hit in 2021. I do think at it's current pricing, Shopify is expensive and hence I will be looking for the stock to dip further to add more to my portfolio. I really think it's a strong long term investment and it will continue to gain market share. Even Amazon took note and is taking them very seriously. Last month Amazon quietly acquired Selz, an Australian tech company that "helps customers sell digital products, physical products and services all from one simple platform"......
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Shopify: The antidote to Amazon's merchant commoditization

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There aren't many credible threats to Amazon's reign as the king of e-commerce. Shopify, however, is a very legitimate one. Last year, it crushed earnings expectations and doubled its revenues again. Shopify vs. Amazon At first glance, Shopify isn’t an Amazon competitor at all: after all, there is nothing to buy on Shopify.com. And yet, there were hundreds of millions of people that bought products from Shopify without even knowing the company existed- eMarketer estimates that Shopify stores processed a little under 9% of all retail e-commerce in the US last year, second only to Amazon, which had 39% market share. I like Shopify and think its strategy is better than Walmart's. Unlike Walmart, currently weighing whether to spend more after the billions it has already spent trying to attack Amazon head-on, with a binary outcome of success or failure, Shopify is massively diversified. How so? Shopify is a platform: instead of interfacing with customers directly, over a million...
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Walmart is not visionary but it knows how to counterpunch

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It's telling that since it launched Walmart+ in September, Walmart hasn’t shared the number of customers who have joined. Even on the last earnings conference call in November, executives repeatedly dodged questions from analysts about the number of sign-ups. Most likely the numbers are disappointing or at least not where Walmart's executives would like them to be. Walmart+ is their response to Amazon Prime. So when Walmart+ launched, Walmart offered it at a discount to Prime. Amazon Prime costs $119 a year. Walmart+ costs $98 a year with the caveat that free shipping is available on orders greater than $35. Typical Walmart. It figured if it bests the competitor (Amazon in this case) on price then customers will flock to Walmart+. However,  what the biggest discounter in the world missed is that customers - especially Prime customers - value speed and convenience the most. Prime's most popular feature is its free and fast deliveries, even for items as cheap as a toothbrus...
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SPAC: Why many unicorns won't hop on the SPAC wagon

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2020 has certainly been the year of blank check acquisition companies - or SPACs.  That's how Nikola- the sexy electric truck shop-, Utz - the iconic snacks company- and Virgin Galactic went public earlier in the year. Plus, it's also how electric vehicle makers Fisker, Canoo, and Lordstown Motors announced they will go public. Plus Plus, famous investor Bill Ackman recently took his SPAC (Pershing Square Tontine) public in the largest-ever blank-check IPO (it raised A whopping $4B). The objective is to buy a mature unicorn. Ackman actually said Pershing might buy a “mature unicorn” 6 times in the filing. However not all private companies are psyched about merging with SPACs to go public. Airbnb reportedly turned down an offer to merge with Bill Ackman's SPAC, saying it prefers going public via traditional. Airbnb isn't alone. Snowflake, Slack, Shopify and BigCommerce are other flashy SPACs that declined the backdoor to going public and opted for the front door through...
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The business of calm

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Last week was a long one. The stress of the election coupled with the pandemic has a lot of us looking for ways to relieve anxiety and invest in wellness from the comfort of home. Increasingly, many are resorting to mental health and meditation apps. Calm, a meditation app, topped Apple's health and fitness category on Election Day — and other mindfulness apps like Headspace weren't far behind.  Why are these apps popular? The anxiety-inducing times, along with poor access to mental healthcare and high smart phone penetration are big contributing factors. However, these are not the only ones. For me, the biggest factor is that the companies making these apps have finally figured out that they are content creators and not just app makers. The features that were available through these apps 5 years ago were a lot more rudimentary compared to what we have today, and so was the content. These apps have heavily invested in improving their content. It's telling that the biggest a...
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Bad signs for the epic market rally

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In the previous post, I discussed reasons that the stock market is rising despite the economic devastation of the pandemic. In this post, I’ll discuss ominous signs from the market rally: Top 1% account for most of the gains: The market is very top-heavy. 1% of the stocks in the S&P 500 - Alphabet, Amazon, Apple, Facebook and Microsoft - account for more than a fifth of the S&P 500’s market value. While those tech giants have gained around 40 percent so far this year, the 495 other stocks in the index have collectively lost a few percentage points. This is bad because the US workforce is concentrated in the other 99% of the stocks. Insider selling is booming: Some leaders of corporate America are skeptical about the sustainability of this rally and are rushing to cash out. According to CNN Business and TrimTabs Investment Research, insiders have dumped more than $50 billion worth of shares since the start of May. The same source also notes that August is on track to be the thi...
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