Bitcoin

Why Square Stock Dropped 8.8% Today – Motley Fool


What happened 

Shares of fintech stock Square (NYSE:SQ) fell as much as 8.8% in trading on Monday as the market continued to sell off growth stocks. As of 2:30 p.m. ET today, shares were still down 6.6% for the day. 

So what 

The biggest news of the day is that growth stocks are selling off broadly. President Biden officially announced that he would nominate Jerome Powell to serve a second term as chair of the Federal Reserve. The market generally sees this as meaning that the Fed will keep interest rates low to improve employment, which could lead to inflation. 

Square terminal being used at a business.

Image source: Square.

Square CEO Jack Dorsey has been outspoken about his belief that we’re already seeing high inflation rates, and for a company like Square, that could mean slower growth over the long term. At least that’s how the market is reacting today. 

To add to the mix, Square released a white paper late last week that highlighted its views on developing a decentralized protocol for exchanging digital and fiat currency called tbDEX. A new division within the company will build a decentralized Bitcoin exchange that could allow the cryptocurrency to easily be used for payment in a variety of ways around the world. 

Now what 

There aren’t any fundamental flaws in Square’s business, and it looks like a broader tech stock sell-off is to blame for Square’s fall today. But in the long term, this is still a great growth stock and a disruptor in payments and cryptocurrencies. 

The fact that Square is looking into building crypto tools for transactions is also very bullish to me. I’m worried that Dorsey only sees values in Bitcoin at the expense of all other cryptocurrencies. But being in the crypto space will be a long-term strength for Square. 

Today’s sell-off might be big, but I don’t see anything for buy-and-hold investors to worry about. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.