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The clear view
When I spoke to Shopify CEO and founder Tobias Lütke earlier this month, I was the first to tell him about an unfortunate headline that had just appeared: “Is Shopify the next WeWork?” Lütke, named Tobi, spoke to me about a major rollout of new features for the platform, which will provide traders with tools to sell their wares digitally directly to customers. He built the company into a somewhat under-the-radar e-commerce behemoth, with more than two million online stores, from literal mom-and-pop business to Chipotle. You’ve almost certainly used it without knowing it, because the branding is subtle. Its growth eventually tripped the collective radar, and the CEO’s gleaming dome at the end of last year punim graced the cover of Bloomberg Business Weekwho called him the Anti-Bezos.
But this year, 16-year-old Shopify hit a wall, thanks to supply chain shortages, a post-pandemic return to real stores and a looming recession. The stock slumped, losing 73 percent of its value. Even the Bloomberg The writer, my former colleague Brad Stone, felt compelled to notice the irony and wondered if he had cursed Lütke with his lavish attention. The timing of all this was particularly inconvenient, as Shopify was about to split its shares – 10 shares for each current one. That’s not something companies usually do when the price tumbles. Another corporate maneuver that suddenly seemed questionable was Lütke’s plan to change the company’s stock voting rules so that his control of the company would be virtually unassailable. All this led to The street ask that alarming question in the headline, which I mention of course during our conversation.
“Oh, Jesus, I didn’t see that”, Lütke responds, his voice slightly accentuated by his German roots. (He moved to Canada in his early twenties, and the company was based there until 2020, when he stated it would be virtual after that.) Pause. “Yeah, okay, that’s funny,” he finally says, though he doesn’t laugh.
But he’s fighting and he’s eager to talk about the new features Shopify is rolling out to make itself even more influential in international commerce. The stock dip, he says, does not reflect the company’s performance or prospects. “Internally, we said time and again that if the stock went up 50 percent, we didn’t get 50 percent smarter in that time. So when it fell 50 percent, we didn’t get any dumber.” Presumably, even a 73 percent nosedive doesn’t indicate a lower IQ.
As for increasing his voting shares, Lükte says he always intended to have minority control, and the current change is due to technical reasons, in part because of Canadian and US rules. “It’s actually not my voice,” he says. “This is a defense mechanism against hostile takeovers.” Not all shareholders were happy with this move, as the measure squeaked with only a 54 percent majority. Lükte also points out that the new power ends with him and cannot be transferred to his successor.
