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Global-E Online Offers High Risk for Potential High Rewards

Timothy Collins is impressed with Global-E Online's potential.
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Analyzing risk vs. reward is arguably the very heart of investing, and that’s never more difficult than when a company promises high rewards at the cost of losing it all. In the case of Global-E Online (GLBE), Timothy Collins analyzes one such play.

“There may be no borders when it comes to e-commerce but there are boundaries," Collins wrote recently on Real Money. "Challenges still exist when transacting business in another country whether we're talking about the consumer or the business. That's where Global-E Online (GLBE) fills a need. The company offers a software-as-a-service (SaaS) platform, enabling retail merchants to leverage an already successful domestic website and launch internationally, while Global-e manages the localization, payments, including taxes and currency, and physical delivery."

He added, "that’s a pretty interesting business model. A company that can stand in the middle and help one business anywhere do business with a customer anywhere… that’s got very real potential. Global-E has also shown growth to go with that promise."

In addition “The company has over 400 brands using its platform, but the thing that has investors and analysts most excited is its partnership with behemoth Shopify  (SHOP) - Get Shopify, Inc. Class A Report . This partnership has yet to contribute any meaningful revenue, but it should act as a strong catalyst over the next few years. Let's not miss the fact that Shopify owns roughly 5% of GLBE, with enough warrants to more than double its ownership stake. 

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So what’s the risk? Well…

“Of course, GLBE holds an aggressive valuation based on the right here, right now. While some see a risk that big names will move logistics in house, JD.com   (JD) - Get JD.com Inc. Report managed to rise to the top in China by focusing on logistics in the e-commerce space because others didn't want to. I see GLBE following in the same footsteps. Short-term I expect volatility, but longer-term, I view GLBE as a high-risk, high-reward name with the reward outweighing the risk.”

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