Shares of Shopify (NYSE:SHOP) declined by more than 17% on Monday, coinciding with a brutal market sell-off.
As the number of confirmed cases of COVID-19 -- the disease caused by the novel coronavirus -- continues to surge around the world, health officials and government leaders are scrambling to slow the spread of the outbreak and mitigate the related economic fallout. The U.S. Federal Reserve, desperate to prevent a recession, cut its target federal funds rate to zero on Sunday. But rather than calm investors' nerves, the move only served to usher in another round of selling on the markets that resulted in the third worst drop in the Dow Jones Industrial Average in history.
High-priced growth stocks like Shopify were hit particularly hard.
In some ways, Shopify's business could benefit from COVID-19. Many physical retailers have been forced to close, and governments worldwide are urging their citizens to stay home. This should help to boost e-commerce sales, many of which will be facilitated by Shopify's platform. As such, investors may want to consider purchasing some shares, particularly if the stock continues to sell off in the days ahead.