This Billionaire Hedge Fund Manager Just Sold Off Shopify Inc (SHOP) and 4 Other Stocks

3. Shopify Inc. (NYSE:SHOP)

Former Value of D1 Capital Partners‘ 13F Position: $414 million

Number of Hedge Fund Shareholders: 72

Daniel Sundheim’s firm was bullish on Shopify Inc. (NYSE:SHOP) in Q4, nearly doubling the size of its position in the online retail platform. It changed course in Q1 however, selling off its entire stake in the company. D1 Capital wasn’t the only fund selling out of Shopify, as hedge fund ownership of SHOP fell by 18% during the quarter.

Shopify Inc. (NYSE:SHOP) shares have been tossed into the discount bin in recent months, losing 82% of their value from peak to trough. The Canadian ecommerce company, which most notably operates a platform for online stores, is in an expansion phase that will likely weigh heavily on margins and profitability. That has proven to be a bad combination with investors given the current bearish state of the tech market. JMP Securities slapped a ‘Market Perform’ rating on Shopify this month, with no price target, stating that the company provides a best-in-class service and should continue to grow its market share.

The Polen International Growth Fund believes Shopify Inc. (NYSE:SHOP) was trading at compelling valuations in Q1, which prompted the firm to buy more shares, as it outlined in its Q1 2022 investor letter:

“We added to the Portfolio’s position in e-commerce company Shopify in the first quarter after a sharp share-price decline. This brought the Portfolio’s weighting in the company to 2%. We believe Shopify provides a uniquely positioned platform, and we like the company’s strategy of continuing to invest in its business in an effort to strengthen its competitive advantages. The market’s affinity for businesses like Shopify may have changed, which created an opportunity for us to build our position in the company at what we believed to be compelling valuations.”