Shopify Inc. has dumped a newswire company owned by Warren Buffett’s Berkshire Hathaway as its disseminator of press releases because it refused to consent to an unconventional request − and replaced it with a tiny Canadian rival that typically issues news for cannabis and junior mining companies.
Last Monday, Shopify, Canada’s largest company by market valuation and a provider of online e-commerce and business management tools to 1.7 million merchants globally, issued a release through Berkshire Hathaway’s Business Wire, announcing a stock offering.
The release included an unusual statement in the corporate boilerplate section. It read: “We were proudly founded in Ottawa, Canada, but prefer to think of the company location as Internet, Everywhere. Shopify is a company of and by the internet, and we have physical outposts around the world. The archaic newswire system doesn’t allow us to acknowledge this fact, so we will henceforth keep this paragraph in our press releases until technology improves.”
The tart words appear to stem from a dispute between Shopify and Business Wire. Shopify wanted to replace “Ottawa” in the release’s dateline, or placeline, with “Internet, Everywhere.” Business Wire said no.
“We require press releases distributed on our platform to adhere to certain formats and standards in accordance with the preferences of our new organization partners, as well as securities laws,” Business Wire said in an e-mailed statement. “Whenever a client comes to us with a unique request, we always engage constructively and attempt to find a mutually agreed-upon solution.” The company didn’t elaborate.
Shopify’s irreverent request is consistent with the character of a disruptive technology company that has chafed at some of the conventional constraints of public company life. Its 2015 prospectus contained an expletive – the retail software provider listed “Get shit done” as an ability it valued in an employee – which caused a debate between executives and company advisers before its eventual inclusion.
More recently, Shopify decided to live by the “digital-by-default” credo permanently, meaning most employees will keep working remotely after the pandemic. The company took a US$31.6-million impairment charge last year to terminate leases or sublet space at some offices, a cost it stated “will yield longer-term benefits,” including opening the company to a diverse global talent pool, eliminating commuting and “fast-tracking new and better ways to work together that are more productive and rewarding.”
Last Wednesday, Shopify chief executive officer Tobi Lutke tweeted: “We were … annoyed that we can’t change” the dateline in Monday’s release. A day later, he tweeted: “We found a wire service that allows us to release press releases with the location Internet, Everywhere”: Newsfile Corp.
Newsfile provides regulatory and compliance services to public companies. It has 2,000 clients – typically small companies that trade on the TSX, TSX Venture and CSE exchanges – and about $10-million in annual billings. The company, with 35 employees in Toronto and Vancouver, has been around since 1997 and moved into electronic press release dissemination a decade ago.
Newsfile co-founder and director Ian Tennant said in an interview that representatives of Shopify’s communications and investor relations department called Thursday afternoon, explaining other wire services wouldn’t allow it to use its chosen dateline in releases. “They wanted a physical location, which is the traditional way of doing it. … This wasn’t your everyday sales call.”
Shopify didn’t respond to multiple interview requests.
Mr. Tennant said his company was happy to oblige: “We’re hungry and we need to be agile, and we’re a little more willing to maybe challenge some established views and positions on something like that. … What if NASA wanted to put out a release for Perseverance and say it was coming from Mars? I don’t have a problem with that.”
Later that day, Shopify issued its first release through Newsfile with its desired placeline. The companies are set to discuss a longer-term contract next week. A typical public company generates tens of thousands of dollars in billings annually, Mr. Tennant said. Signing Shopify as a flagship client would be “pretty big” and help attract new clients, he said. “We want to make sure we can keep them.”
Mr. Tennant noted the press release business “is slow to adapt and evolve. In 2021, everyone is working from home. Maybe the old concept of physical locations has changed. We’re entirely work-from-home, and an internet-based company” – and, like most Shopify customers, a small business. “Maybe that’s why this resonated with us.”
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Sean Silcoff