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Shopify Inc. Class A Subordinate Voting Shares (SHOP)
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Lightspeed Commerce Inc. Subordinate Voting Shares (LSPD)
Q: My question from October 10, 2023.
“Everyone, I have held LSPD since the summer of 2019 and I bought and sold throughout the last 24 months. My remaining amount is less than 2% so not a significant amount of $. They have $700 million plus in cash; they call EBITDA positive this year; they reduced the head count which lowers expenses; interest rates will be increased once or twice then a wait period and then a slow decline. All positives for the stock price. And the Quebec Pension still owns a large block of shares - they haven’t given up! The stock price seems to have held at this price range, so there is no real material downside risk. SQ and Toast are in the same stock price position, an industry decline not a stock specific decline. In a better market this stock will quickly do a triple from here.. So … buy and wait … or… move on? Clayton”
This past year LSPD has been in a trading range of $17 ish to $15 ish. Today it has moved above that range with heavy volume. Is it time to buy or wait! If you are waiting, what are you waiting for?
Clayton
“Everyone, I have held LSPD since the summer of 2019 and I bought and sold throughout the last 24 months. My remaining amount is less than 2% so not a significant amount of $. They have $700 million plus in cash; they call EBITDA positive this year; they reduced the head count which lowers expenses; interest rates will be increased once or twice then a wait period and then a slow decline. All positives for the stock price. And the Quebec Pension still owns a large block of shares - they haven’t given up! The stock price seems to have held at this price range, so there is no real material downside risk. SQ and Toast are in the same stock price position, an industry decline not a stock specific decline. In a better market this stock will quickly do a triple from here.. So … buy and wait … or… move on? Clayton”
This past year LSPD has been in a trading range of $17 ish to $15 ish. Today it has moved above that range with heavy volume. Is it time to buy or wait! If you are waiting, what are you waiting for?
Clayton
5i Research Answer:
LSPD's price action is improving alongside a broader 'risk-on' rally, and based on improved investor sentiment and potentially improving margins and fundamentals in 2024, we feel LSPD can continue its momentum higher. We feel the question of whether to buy or wait with LSPD largely hinges on opportunity cost. We would be comfortable slowly accumulating LSPD here while acknowledging that it has higher risks and is a smaller name, but overall, we would be more comfortable from a total risk/reward perspective buying and holding SHOP today.