Shopify and Rise on Buyout Speculation

Will we soon be buying postage stamps from Shopify (NYSE: SHOP)? Citron Research very much thinks so; it believes the retail tech solutions company will purchase (NASDAQ: STMP).

Citron, the often highly critical stock-commentary site, explained its reasoning in a tweet posted Monday morning. "Valuation gap has never been larger. On [forward 12-month] EV/Sales, [Shopify] at 44x vs. [] at 6x and [] is the proven leader in online postage... the essential tool for small biz not owned by [Shopify]," Citron wrote.

A man stuffing a letter in an envelope.

Image source: Getty Images.

In Citron's opinion, such a deal would be a windfall for investors. It believes if Shopify pulls the trigger, an all-stock deal could total $400 per share. If it reaches that level, it would represent a rich premium of roughly 73% on the latter's current stock price.

Citron did not provide any sources for its view that Shopify will move on Neither company has yet commented on the tweet.

Although Shopify isn't a particularly acquisitive company by the standards of the ambitious and competitive e-commerce industry, it has purchased various assets over the years. These, however, tended to be relatively modest in scale. Last September, for example, it announced it was paying $450 million for 6 River Systems, a little-known warehouse robotics specialist.

By comparison, is a very big fish. At the moment, its market capitalization tops $3.9 billion.

Investors piled into both companies on Monday following the Citron speculation. Shares of Shopify were up by almost 9% and those of rose by over 6% in late afternoon trading, well outpacing the gains of the wider market.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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