Investors who owned stocks in the past five years generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return over that stretch is 53.8%. On this day five years ago, Shopify Inc (NYSE: SHOP) held its IPO, and IPO investors have made a killing ever since.
Shopify’s Big Debut
E-commerce solutions giant Shopify was founded in 2004 and made the move to go public 11 years later. It priced its IPO at $17 per share on May 21, 2015. Shopify had initially targeted the $12 to $14 range, but robust demand pushed the price up to $17 and allowed Shopify to raise $131 million by selling 7.7 million shares. At the time of its IPO, the company was valued at $1.27 billion.
After selling IPO shares at $17, Shopify shares hit the ground running, soaring up to $42.13 during the frenzy surrounding its IPO. However, the stock soon ran out of steam due in part to concerns over the stock’s IPO lockup expiration.
Shopify shares dropped to their all-time low of $18.48 in early 2016 before beginning a multi-year ramp on the strength of impressive growth and bullish headlines.
One of the biggest headlines came in January 2017 when Shopify announced a new integration with Amazon.com, Inc. (NASDAQ: AMZN) that would allow merchants to sell on Amazon’s platform via their Shopify stores. Shopify shares initially jumped nearly 10% following the news.
Shopify stock hit $100 in 2017, $200 in early 2019, $500 in early 2020 and was one of the few stocks that hasn’t been derailed by the COVID-19 outbreak. In fact, Shopify hit its all-time high of $778 on Thursday, the five-year anniversary of its IPO.
2020 And Beyond
Five years later, Shopify IPO investors that have held onto their stakes undoubtedly see the stock as one of the best investments of their lives.
In fact, $1,000 worth of Shopify IPO stock in 2015 would only be worth about $45,764 today.
Looking ahead, analysts expect Shopify to finally cool down a bit in 2020. The average price target among the 27 analysts covering the stock is $725 suggesting 6.4% downside from current levels.