Although it reported a higher than estimated earning, Shopify stock plunged to its lowest as investors wait for the end of stock lockup.

Shopify is a Canadian tech company that develops e-commerce site for online store and point-of-sales. It went public in May this year and in its debut trading, it raised more than $131 million and performed better than expected.

However, according to Bloomberg, the company shares fell 3.5% to $27.35 at the close Monday in New York, the lowest price since Sept. 14. According to analysts, investors are selling ahead of the expiring lockup. Lockup agreements  keep a company's share price stable in the months following an IPO by preventing employees and early investors from dumping the stock. In Shopify's public offering, 8.9 million shares were available and has gained 61% since it went public in May. It was recorded as one of the best-performing North American technology IPOs of the year. 

"The stock has been a tremendous performer right out of the gate," said Tillman, who has the equivalent of a hold rating on the stock. That's also made it expensive compared with similar companies",  Terry Tillman said. an Atlanta-based analyst at Raymond James.

Shopify was founded in 2004 by Tobias Lutke, after his disapointment of existing e-commerce products in the market for his snowboarding equipments' online store. Lutke then developed e-commerce platform for his online shop, that he operated with his two partners. Two years later, the company shifted its focus to sell e-commerce platform instead of snowboarding equipments. Hence, Shopify was born in 2006, and prove to be a very successful e-commerce platform. Prior to the IPO, more than 200,000 merchants have used Shopify platform including big brands like Budweiser and Tesla. In the IPO, Shopify stock was traded at $28, a 60% higher than its initial offering at $17. It also provided a lockup option for employees and early investors.

The Globe and Mail reported that Shopify's 180 day stock lockup will end on Nov. 17. At that time, hundreds of Shopify's employees and early investors will have their first chance to turn their paper gains into cold hard cash. After the unlocking, if employees and early investors sells their stock, there will be 67 million shares available in the market

Toronto Star dubbed the Ottawa-based company as Canada's tech darling. Shopify is also one of five members of the country's "unicorn club," an exclusive group of startups companies worth $1 billion either on public markets, or based on estimates of their sales and growth potential. 

Last week, Shopify has just reported its higher than estimate revenue in third quarter that soared at 93% to $52.8 million. However, its stock performance plunged approaching the day its stock lockup agreement to be expired, as investors are expecting employees to sell their stock in the market.