Shopify’s Surge Can’t Keep CE 100 Index From Slipping 1.5%

The scorching post-election rally that lifted stocks across all market capitalizations and verticals paused this past week.

Even post-earning surges in select CE 100 names were not enough to lift the overall index, which slipped 1.5%. Eight of the 11 pillars lost ground, along with the broader markets, which slid this week, too.

Shopify’s stock roared ahead by 24.3%, but nonetheless the Shop segment led declining verticals, off 5.1%.

As we reported in the wake of Shopify’s earnings, President Harley Finkelstein said during the company’s conference call, “We want to create new ways for merchants to engage and drive authentic connections with customers.”

Finkelstein noted new features, including Shopify Flow, Shopify Finance and Shop App, all of which have helped elevate customer engagement for its merchants.

Shopify reported a 26% increase in revenue for the third quarter to $2.2 billion while gross merchandise volume (GMV) rose 24% to $69.7 billion.

Vroom Sinks on Bankruptcy Filing

Vroom shares cratered 41%, overwhelming Shopify’s gains in the shopping pillar. The company filed for Chapter 11 bankruptcy Wednesday,  saying in a filing with the Securities and Exchange Commission that it plans to operate its business as a “debtor-in-possession” under the jurisdiction of the bankruptcy court. None of its subsidiaries are expected to commence Chapter 11 proceedings, Vroom said in the filing.

“Since winding down our eCommerce used automotive dealer business, we have been focused on maximizing the value of our remaining assets for our stakeholders,” Vroom CEO Tom Shortt said in an announcement tied to the filing.

“We believe eliminating our unsecured notes will significantly strengthen our balance sheet and allow us to emerge without any long-term debt at Vroom Inc., while its subsidiary, UACC, will continue to be obligated to debt that is related to asset-backed securitizations and their trust preferred securities.”

Elsewhere, the Porch Group slipped 19%, giving back some of its post-earnings gains from earlier in the month.

Affirm, Visa Gain on Flexible Credentials

Affirm’s 20% gain and Visa’s 0.6% increase helped buoy the Pay and Be Paid segment by 1.8% on the week.

As reported here, the Visa Flexible Credential (VFC) is being rolled out in the U.S. with the Affirm Card (already in the market), the buy now, pay later (BNPL) provider’s debit card that allows consumers to opt to pay over time for transactions made through the Affirm app.

In an interview with Karen Webster, Mark Nelsen, chief consumer product officer at Visa, noted that the two companies have been working together for two years, and Affirm will be leveraging VFC to create a new account that lets the 1.4 million Affirm Card-wielding consumers use a virtual debit product to either pay now or pay over time, wherever Visa is accepted.

“What we’re doing is helping Affirm get to as many customers as they can … allowing them to pay in the ways that they want,” Nelsen said. Consumers have the ability, depending on the issuer, to set parameters for their transactions, where they might automatically opt to use debit for transactions under a certain amount and BNPL for payments above that threshold.

‘Fun’ Names Gain Ground

Disney jumped 15.9%, as the Have Fun group advanced by 4.3%. Fiscal fourth-quarter earnings showed that revenues of $22.6 billion were higher than the $22.5 billion held by the consensus forecast and were 6% above last year’s levels. The company’s direct-to-consumer streaming business notched operating income of $321 million, where the unit had lost $387 million a year ago.

And Spotify shares gathered 14.5% in the Fun designation. In company earnings this past week, monthly active users increased 11%, to 640 million; subscribers grew 12%, to 252 million; and total revenue rose 19%, to €4 billion ($4.2 billion). Management noted that user engagement has gotten a boost from the introduction of the AI Playlist, which uses generative artificial intelligence to curate personalized playlists, has been rolled out across the U.S. and Canada, with plans to expand that reach.