Citron Research's Andrew Left, who gained attention for successful bets against companies including Valeant Pharmaceuticals, sent shares of e-commerce platform Shopify reeling on Wednesday.
According to Left, the company presents itself as providing e-commerce solutions to medium- and small-sized businesses, but it may be promoting a large number of seedy "opportunity" sellers and may have far fewer participants than the 500,000 it claims.
"Shopify says they have 2,500 Shopify plus merchants out of their universe of 500,000. Now let's say they have another 20,000 Shopify Advanced," Left said in a video on Citron's website. "The question I ask you, the question no one on Wall Street has addressed is who are the other 450,000 merchants on Shopify?"
A Shopify spokesperson offered this comment to CNBC: "We vigorously defend our business model and stand resolutely behind our mission and the success of our merchants."
Shares of Shopify plunged more than 8 percent to $106.95 on Wednesday after Left's report. Shopify has been one of the best performers on the Nasdaq this year, up more than 150 percent since January.
Left said that many of the people selling to Shopify websites are disreputable and advertise "get-rich-quick" schemes instead of legitimate goods or services.
He also explained that Shopify has been providing unbelievable numbers about its business, including that "2,700 people become millionaires each day." The Shopify website even provides people with a sample resignation letter they can give to their boss when they're ready to quit their job.
Left confirmed to CNBC that he is short the stock. His report gives a price target for Shopify of just $60 a share, about 45 percent below where it was trading Wednesday.
— With reporting by CNBC's Deirdre Bosa.
Correction: Shares of Shopify plunged more than 7 percent on Wednesday after Left's report. An earlier version misstated the day.