Q: I am wondering if the Nasdaq listing and mandatory purchasing is contributing to Shop's volatility and sudden upticks lately. When do Nasdaq-listed funds have to complete their quota of Shop purchases? Is it possible that Shop could fall back once this deadline passes?
5i Research Answer:
SHOP was added to the Nasdaq 100 on May 19, and that is when index funds would have started buying and likely finished very soon after. Index funds cannot afford to try and 'time' purchases as their goal is to match index returns. The stock has always been volatile and we are not sure recent moves are that different than historical moves. It has been a crazy year for volatility with tariff flip-flops and international tensions.