Shopify (SHOP -2.33%) popped 11% on Thursday after members of its leadership team said they were purchasing shares.
Shopify's sales skyrocketed during the early stages of the pandemic when coronavirus fears and store closures drove more people to shop online. The e-commerce platform's stock price went on to more than quadruple at one point to over $1,700 per share.
However, Shopify's pace of expansion has decelerated in recent quarters, as people returned to traditional retail stores after coronavirus-related restrictions were lifted. Shopify's revenue growth slowed to 22% in the first quarter, down from 41% in the fourth quarter and a whopping 110% in the prior-year period.
The slowdown has sparked a wave of selling of Shopify's shares. A broadscale exodus out of premium-priced growth stocks in recent months, due in part to fears of inflation and the negative economic effects of the Federal Reserve's moves to tame it, accelerated and worsened the decline. Shopify's stock price, in turn, has essentially made a round trip to where it was trading before the pandemic began.
Yet apparently, several members of Shopify's management team believe investors have overreacted, and they're using the sell-off to scoop up shares of the e-commerce leader at a steep discount to its recent highs. On Wednesday, CEO Tobi Lütke said on Twitter that he placed a $10 million buy order for Shopify stock. The company's president, Harley Finkelstein, and Vice President of Merchant Services, Kaz Nejatian, also said they were buying shares.
It's often said that insiders sell for many reasons, but they buy for only one: They think the stock is headed higher. If that's true, the recent spate of insider buying bodes well for Shopify's investors.