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Why Hot IPO Global-E Gained 15% in November

By Jennifer Saibil – Dec 7, 2021 at 9:05AM

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The cross-border solutions company posted a great third-quarter report. Then came omicron.

What happened

Shares of cross-border e-commerce company Global-E Online (GLBE 2.38%) gained 15% in November, according to data provided by S&P Global Market Intelligence. The company posted a solid third-quarter earnings report in November. However, it's erased all of those gains already in December.

So what

Global-E markets cross-border shopping and payment solutions for e-commerce companies. These include features such as shopping in local currencies and instant shipping and customs calculations. Its client list includes top-tier names like Hugo Boss and LVMH, and it's demonstrating solid growth. 

A vendor at a computer with packages behind them.

Image source: Getty Images.

In the third quarter, gross merchandise volume increased 86%, and revenue increased 77%. It added new clients to its roster and expanded relationships with several others. It's particularly enjoying its partnership with Shopify, which has broadened its exposure to new merchants. Global-E is easily integrated into Shopify's platform as well as many other e-commerce platforms, such as Meta Platforms (formerly known as Facebook), and it has programs for both large and small companies.

Management raised its full-year outlook after the report, and it's expecting $77.4 million in fourth-quarter revenue at the midpoint, and $240 million in full-year revenue. That was raised, quite a lot, from $229 million at the midpoint, and it reflects a company with high growth potential. The company is well positioned to benefit from trends toward global e-commerce and digital payments. 

However, as investor fears about the new omicron coronavirus variant took hold of the markets over the past few weeks, Global-E stock wasn't spared. It's directly in the line of new pandemic restrictions, which could impact global commerce, supply chains, and economic policy.

Now what

Global-E posted a $29 million loss in the third quarter related to its relationship with Shopify. It has, however, been profitable in the past, which is a strong point in its favor, and not so typical for a new growth company.

Its stock has gained 138% since its initial public offering in May, even with the declines in December. The company is dealing with short-term volatility, but it has a strong future ahead.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Meta Platforms, Inc. and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

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