Shopify Tumbles as Euphoria Is Put to the Test

E-commerce platform provider has more than doubled this year
Price-to-sales ratio is higher than any S&P 500 tech stock

Signage is displayed outside the Shopify Inc. office in Waterloo, Ontario, Canada, on Sept. 13, 2018. Shopify Plus, the company's highest-tiered subscription, is attracting migrations from other platforms. In 2Q, more than 50% of customers that were added to the service were new to the Shopify platform.Photographer: Cole Burston/Bloomberg

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By Jeran Wittenstein

June 25, 2019 at 7:00 PM UTC

Updated on

June 25, 2019 at 8:16 PM UTC

This article is for subscribers only.

Shopify Inc.’s biggest drop of 2019 shows the e-commerce stock is testing the limits of what investors are willing to pay for rapid revenue growth.

The shares fell 8.9% in New York on Tuesday, their biggest drop since Dec. 14, after more than doubling from the start of the year. That run-up created more than $25 billion in market value as investors looked past rising competitive threats and focused on fast-growing sales and new online checkout products. The money-losing company’s shares now trade at around 21 times estimated sales, more expensive by that measure than any technology stock in the S&P 500 Index.