What happened
Sometime later this year (or early next year), credit card payments processor Stripe is expected to make its debut on the public markets in an IPO -- and investors are excited.
The surprising thing is that today, at least, they're not just excited about Stripe ... but about Shopify (SHOP +4.16%) stock as well, which is up 4.5% as of 3:45 p.m. EDT trading.
Image source: Getty Images.
So what
What does the one thing have to do with the other? Well, it turns out that Shopify will benefit from the Stripe IPO.
As The Wall Street Journal just reported today, Shopify participated in a funding event at Stripe in which bidders including mutual fund company Capital Group, venture capital firm Sequoia Capital -- and Shopify, too -- bought about $1 billion worth of Stripe shares prior to its IPO.
Now what
Admittedly, this still doesn't give Shopify anything like a controlling interest over Stripe, which was valued recently at about $95 billion. All told and including this latest investment, WSJ says that Shopify has invested only about $350 million in Stripe, which works out to less than a 0.4% interest in the company.
Still, if Stripe explodes in value upon its IPO, that could yield a tidy profit for early investor Shopify -- and a nice boost to the value of investors' shares ... in both Shopify and Stripe.
