Shopify Falls After Fund Manager Says The Stock 'Got A Little Ahead Of Itself'

Shares of Shopify Inc (US) SHOP were trading lower by 7 percent Tuesday after another short thesis came to light.

Shopify on Oct. 4 was named by Citron Research as a company that's "dirtier than Herbalife" and is worth at best $60 per share. A new report by Canada's Business News Network may be contributed to the stock's weakness, although it adds no new information to the story.

Canadian fund manager Alex Lane echoed some of the concerns raised by Citron and is now short the stock, BNN reported.

Lane, a manager for Dynamic Funds Portfolio, said his short thesis is similar to those echoed by Citron and was initiated at around the same time that report surfaced.

Although Lane did stop short of equating Shopify with a multi-level marketing scheme, he is concerned with the stock's valuation.

"It's nothing against the business model, or anything like that. They've done a fantastic job, it's great to see the creation of a new Canadian technology champion," he said. "Valuation got a little bit ahead of itself, I would say, and if you're looking for pockets of euphoria in the market, that was clearly a stock that was based on a lot of euphoria."

Long doesn't see any reason to suggest there are any "fundamental deterioration at this time but the fact is the stock had simply "gotten ahead of itself."

Noting it's similar to Valeant Pharmaceuticals Intl Inc VRX, Lane said, "you see some of the bloom come off the rose and the multiple contracts for a period of time."

Related Links:

The Polarizing Story That Is Shopify

Shopify Chopped After Citron Makes Bearish Call