It’s been a bad week to be a mid-size tech firm. News broke today that Shopify is telling its merchants not to use Amazon’s Buy with Prime feature, which lets online stores use Amazon Prime’s speedy shipping service. The news signals that those at Shopify opposing integration with Amazon’s new service won an internal debate we previously described here. And no wonder: Shopify is already struggling with a sharp slowdown in online shopping, reflected in the 77% drop in its stock price this year. In this environment, you can understand Shopify’s reluctance to do anything to benefit Amazon.
Shopify’s weakened position, which led to mass layoffs, has parallels in the other big corporate news this week, Snap’s decision to lay off 20% of its workforce. Snap is also grappling with a stomach-churning deceleration in its business, which has dragged its stock price down nearly as much as Shopify’s. Both companies are laboring in the shadows of much bigger rivals: Amazon and Meta Platforms, respectively. The latter two firms haven’t exactly been immune from the slump in their respective markets, but their deep pockets protect them. Amazon, for instance, had about $61 billion in cash and securities on its balance sheet at June 30, while Meta had $40.5 billion. Shopify, in contrast, had $6.9 billion to draw on, and it burned cash in the first half of this year. Snap had even less cash on hand and also burned cash in the most recent quarter.
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