Why Lightspeed (TSX:LSPD) Stock Jumped 10% on Tuesday

Lightspeed (TSX:LSPD)(NYSE:LSPD) stock climbed 10% in early-morning trading on Dec. 7 after a partnership with The Bay was announced.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published December 7, 2021 11:06 am EST

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Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) finally saw some positive movement on Dec. 7. Lightspeed stock shares went as high as 10% in early trading after an announcement of a partnership with The Bay.

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What happened?

Lightspeed stock climbed after announcing that its NuORDER acquisition would be partnering with The Bay. The company boasts one of the largest premium life and style digital platforms in the country. The Bay chose NuORDER by Lightspeed stock to help connect buyers and supplies in real time in different markets to complete orders as quickly as possible.

“We are driving a customer-centric approach across our business,” said Laura Janney, chief merchant, The Bay. “The NuORDER by Lightspeed platform now streamlines our internal process with significant speed and efficiency, and allows us to elevate and cater to market preferences through curated on-trend assortments.”

So what?

The positive movement is the first major movement since September, after Lightspeed stock fell due to a short-seller report. In the report, Spruce Point Capital Management claimed the recent acquisitions weren’t doing as well as predicted.

A further fall came when Lightspeed stock reported earnings. In the report, Lightspeed stated the next quarter may not be so great, as supply chain demands weigh on both the company and its merchants. Further, its acquisitions fuelled a loss of $59.1 million — a major jump from around $19 million the year before.

This NuORDER partnership couldn’t have come at a better time. The Bay launched Marketplace earlier this year on thebay.com. This was to rapidly expand the company’s e-commerce business to get back some of its market share. The company has taken on a record number of new sellers, introducing more than 1,500 new brands since April as of the summer.

Now what?

The launch of Marketplace will hopefully put The Bay back on top, as it’s now the sixth largest e-commerce business in the country. The iconic retailer has recognition on its side, which is likely exactly why so many investors hopped back on the Lightspeed stock bandwagon.

The success of a NuORDER partnership would be just what the company needs to get back on track. Meanwhile, the short-seller report remains unproven. This is why, even with more losses and a short-seller report in the background, analysts remain confident about Lightspeed stock’s future.

Analysts currently give the company a target price of $125. Shares of Lightspeed stock trade at $65 as of writing, up 10.2% in early morning trading.