A selloff is fracturing the tech market — and Shopify may be on the wrong side of it

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The tech stocks that are faltering now are those that benefited most from the work\u002Dfrom\u002Dhome rotation

The tech stocks that are faltering now are those that benefited most from the work-from-home rotation. Stocks such as Shopify had more than tripled from their March lows as e-commerce became an obvious area of strength, while cloud companies like Fastly and Twilio Inc. are up more than 400 per cent and 200 per cent, respectively.

Former hotshot Zoom Video Communications Inc. along with Shopify and Fastly, have each shed between 12 and 19 per cent of their value.Jefferies Financial Group Inc. global equity strategist Sean Darby published a note earlier this week in which he downgraded the tech sector in the United States to “modestly bearish” from “modestly bullish” in anticipation of a selloff due to conditions he compared to the 2000 bubble.

Also like Munster, Wong has separated the tech space into two baskets: in his case, high octane stocks and ol’ reliables. Kim Bolton, president and portfolio manager of Black Swan Dexteritas Inc. has deployed a long/short strategy and placed a short equity indexes hedge of 65 per cent in his tech fund to offset any volatility.“It’s not as though people are becoming bearish on the semis or the software applications or internet or data centres,” he said.

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