From Seeking Alpha Blog
- Shopify is now flush with cash with over $900 million. We only value the cash as cash. If the company makes more acquisitions like Kit, it could be worth much more.
- We expect 10% long-term annual returns on our money. At a 10% discount rate, our fair value is adjusted to $90/share from $91/share post equity raise.
- Other investors with access to cheaper money or with lower expectations for long-term returns could calculate a higher fair value than us.
- With an 8-9% discount rate, our model yields a share price between $109 and $136.