Shares of Shopify lost as much as 8.3% on Thursday afternoon. At 1:56 p.m. ET, the company’s stock was still off 7.4%.
Current technology stocks dropped because of a new app store that had developers seeing red.
Shopify’s shares surged above $87 per share on Wednesday but then slumped to as low as $77.41 at 1:56 p.m., before recovering somewhat and trading at $79.93 at 2:06 p.m., down as much as 8% from Wednesday’s close of $86.53 per share, according to data compiled by Bloomberg.
Shopify released some updates on their algorithms in mid-December, resulting in some changes. Along with their updates, the company also released several other apps that fit their ecosystem better.
One of the changes that they made was to make it harder for online stores to remain profitable. Their algorithm now puts a greater emphasis on how much customers are spending, which is great for those stores that sell more expensive products.
The algorithm also impacted their apps, which they release in order to help online stores grow and be successful. They released a new app called “Shopify Plus
Major sellers of apps compatible with Shopify’s platform have complained that recent updates have pushed their app content below competing apps, as reported in an article published by Business Insider.
Online merchants need some help with their app development to reach a wider audience. Shopify offers thousands of apps so potential buyers with any requirement can easily find what they’re looking for.
In other words, Etsy needs developers for merchants to attract and retain customers.
It could be argued that many come to Etsy because of the ease of use along with these easy-to-add apps.
This could potentially hurt Shopify in the short term, as one or two developers may not mean much, but 7,000 of them would undoubtedly impact it. This could mean that Shopify’s share price will continue to drop.
As of now, investors should consider buying this stock on the rebound. Price prediction models suggest that it could reach $2,000–a 50% increase from the current price and more hope for developers looking to acquire it.
By ousting its most popular developers, Shopify could end up reducing its own potential.
Developers have long criticized Shopify for its lack of developer tools and features. One user, who goes by the handle “ShopifyHater,” posted a video on YouTube criticizing Shopify’s new tools.
“So, what I’m seeing with this is that they’ve cut off the nose to spite their face,” ShopifyHater said in the video. “The old way