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The ordinary view
When I spoke to Shopify’s CEO and founder, Tobias Lütke, earlier this month, I was the first to tell him about an unfortunate headline that had just surfaced: “Is Shopify the next WeWork?” Lütke, who goes by Tobi, talked to me about a major rollout of new features for the platform, which gives merchants tools to digitally sell their goods directly to customers. He built the company up to an e-commerce giant just under the radar that operates more than two million online stores, from literal mother-and-pop operations to Chipotle. You have almost certainly used it without knowing it as its branding is subtle. Its growth eventually knocked out the collective radar, and last year, the CEO’s shiny dome-shaped punim adorned the front of Bloomberg Businessweekwho baptized him Anti-Bezos.
But this year, 16-year-old Shopify hit a wall thanks to a lack of supply chains, a post-pandemic return to actual stores and a looming recession. Its action tanks, lost 73 percent of its value. Self Bloomberg author, my former colleague Brad Stone, felt compelled to notice the irony and wondered if he had it cursed Lütke with his lavish attention. The timing of all this was particularly awkward as Shopify was splitting its stock – 10 shares for each current one. This is not something companies usually do when the price drops. Another corporate maneuver that suddenly seemed questionable was Lütke’s plan to change the company’s rules for voting shares so that his control of the company would be virtually unassailable. All this led to The street asks the alarming question in his headline, which I of course mention to him during our chat.
“Oh, Jesus, I did not see that,” Lütke replies with a bit of an accent in the voice of his German roots. (He moved to Canada in the early 20s and the company was based there until 2020, when he stated that it would then be virtual.) Break. “Yeah, okay, it’s funny,” he says at last, though he doesn’t laugh.
But he’s struggling, and he’s eager to talk about the new features Shopify is rolling out to make itself even more influential in international trade. The stock dip, he says, does not reflect the company’s results or prospects. “We said internally, over and over again, when the stock rose 50 percent, we did not get 50 percent wiser at that time. So when it fell 50 percent, we did not get dumber.” Presumably, even a 73 percent dive does not indicate a lower IQ.
In terms of increasing his vote share, Lükte says he always intended to have minority control, and the current change is due to technical reasons, in part due to Canadian and US rules. “It’s actually not my voice,” he says. “This is a defensive mechanism against enemy takeovers.” Not all shareholders were happy with this move as the measure creaked past with only one 54 percent majority. Lükte also points out that new power ends with him and cannot be passed on to his successor.