May 2019 Movements in the SMB Software Index
May represented another slow month for the SurePath SMB Software Index, gaining just 1.8%. However, it compared favorably to the S&P 500 which lost nearly 6%, the Nasdaq which lost over 7%, and the Dow Jones which lost over 6%.
Drivers of Movement
The SCP SMB Software Index is a weighted based on the market capitalization of the 37 companies that are included in the index. The market cap of the top 5 companies accounts for more than half of the total market cap combined index and therefore, the movement of these 5 companies influence the SMB Index as a whole.
After Shopify replaced Atlassian as a member of the top 5 last month, Atlassian made it back into the top 5, this time replacing Square. Square has had a relatively poor 2019 compared to the Index at large, having gained only 8% as of the end of May (though this has increased to over 20% as of this article’s publishing), compared to nearly 40% for the broader SMB Software Index, nearly 100% for Shopify, and over 40% for Atlassian.
The Top Gainers and Losers for May
In May, the best performer of all index companies was Atlassian, which grew ~16% during the period driven by an upgraded price target from Goldman Sachs. The poorest performer was Stamps.com, which lost over 60% in May after announcing that the US Postal Service would be renegotiating service agreements with several of Stamps.com reseller partners. This was after it announced that it would be ending its long-standing exclusive partnership with USPS in February. The stock is down nearly 80% this year.
Here’s how all index companies stacked up in May
You can follow the SurePath SMB Index in real time at: http://www.surepathcapital.com/smb-index
About SurePath Capital
Based in Toronto and San Francisco, SurePath Capital Partners is the only investment bank focused exclusively on the global SMB software market. We work with sellers in this market to ensure they are funded for growth and positioned for meaningful exits. In addition, we work with buyers in this market to help shape their strategy and execute acquisitions.