Cathie Wood bought SQ stock on February 2, 2022.
Cathie Wood Buys SQ Stock
Cathie Wood’s ARK Investment bought 549K shares of Block (SQ) stock on February 2, 2022. The estimated market value of the transaction is a whopping $63 million.
Block reinstated with an Overweight at JPMorgan
On February 2, 2022, JPMorgan analyst Tien-Tsin Huang reinstated Block coverage with an Overweight rating with a price target of $200, down from $320, following a restriction period. The company’s current valuation and growth are “quite attractive” with new product launches serving as positive catalysts, “de-risking the hard/soft-landing concern for stand-alone Cash App growth deceleration near-term,” Huang tells investors in a research note. Block has created “two powerful” independent ecosystems serving consumers and sellers and Afterpay “is an elegant way to bring both together to create a formidable two-sided network,” says the analyst.
Square Sellers Can Now Offer Buy Now, Pay Later Through Afterpay
On January 31, 2022, Square launched its first integration with Afterpay, providing “Buy Now, Pay Later” (BNPL) functionality to sellers using Square Online for e-commerce in the United States and Australia. The integration will enable Square sellers to offer Afterpay’s BNPL experience to their customers, helping them attract new shoppers and drive incremental revenue. This product integration becomes available when Block, Inc. (NYSE: SQ) announces it has completed its acquisition of Afterpay.
“Using Afterpay on our Square-powered website has been a huge boost to business,” said Jeannie & Kendall Glenn, owners of Kendall’s Greek Smartwear. “Our purchases are nearly 20% larger when shoppers use Afterpay, and we receive earnings instantly in our Square account to keep our business moving. Our repeat customers appreciate the new BNPL option, especially since they can keep earning points through our Square Loyalty program, and we’ve been able to engage and convert more new customers than ever before through e-commerce.”
Nearly 56% of American consumers have used a BNPL service (source), and the fastest-growing consumer segments, Gen-Z, and Millennials, comprise 75% of BNPL users (source). Square sellers can now serve this growing consumer demand, including in markets like Australia, Square’s largest market after the U.S., and where Afterpay has very high awareness and repeat usage. Afterpay also furthers Square’s omnichannel, upmarket, and global growth.
“In joining with Square, Afterpay can now more meaningfully give small and midsize sellers the tools to attract young, engaged shoppers who prefer Afterpay and help these sellers compete alongside businesses of all sizes,” said Nick Molnar, Afterpay Co-Founder and now Afterpay Lead at Square. “And this is just the beginning. As part of Square’s powerful ecosystem, we look forward to continuing to more deeply integrate the Afterpay platform to unlock even more value for sellers across the world in the coming weeks and months.”
“We’re thrilled to offer Afterpay to Square sellers on day one. This is truly just the beginning of what we’ll be able to offer sellers, and their buyers, through this acquisition,” said Alyssa Henry, Head of Square. “Our mission is to help sellers never miss a sale, operate more efficiently, better manage cash flow, and improve growth, retention, and acquisition of buyers. Afterpay helps us further this mission. It will also help bring more businesses of all sizes into the Square ecosystem.”
Afterpay is available today to Square sellers, who can try Afterpay for no extra cost until May 10. Sellers can access Afterpay from their Square Online dashboard and opt-in to receive early access to Afterpay now, with automatic enablement rolling out to eligible Square Online sites over the following weeks. Afterpay can be easily toggled on or off via sellers’ Square Online dashboard at any time. Afterpay transactions are processed at sellers’ standard e-commerce processing rates during the promotional period. Square sellers immediately receive their total earnings from each sale, while consumers pay over four interest-free installments. Afterpay will also soon be available on Square’s developer platform and in-person payments.
Block, Inc. Completes Acquisition of Afterpay
On January 31, 2022, Block, Inc. (NYSE: SQ) and Afterpay Limited announced the successful completion of the Scheme of Arrangement under which Block has acquired all of the issued shares in Afterpay. This transaction aims to enable Block to deliver better compelling financial products and services that expand access to more consumers and help drive incremental revenue for sellers of all sizes.
“We’re excited to welcome the Afterpay team to Block and are eager to get to work,” said Jack Dorsey, Block co-founder, and CEO. “Together, we’ll deliver even better products and services for sellers and consumers while staying true to our shared purpose of making the financial system more fair and accessible to everyone.”
The acquisition furthers Block’s strategic priorities for its existing Square and Cash App ecosystems. Together, Square and Afterpay intend to enable sellers of all sizes to offer ‘buy now, pay later’ (BNPL) at checkout, give Afterpay consumers the ability to manage their installment payments directly in Cash App, and give Cash App customers the ability to discover sellers and BNPL offers directly within the app.
Today, Square also launched its first integration with Afterpay, providing Afterpay’s BNPL functionality to sellers in the United States and Australia that use Square Online for e-commerce. This new omnichannel commerce tool can help sellers attract new shoppers and drive incremental revenue from day one. For more information on this announcement, read the press release here.
Afterpay co-founders and co-CEOs Nick Molnar and Anthony Eisen have joined Block. They will help lead Afterpay’s respective seller and consumer businesses as part of Block’s Square and Cash App ecosystems.
Block has also appointed Sharon Rothstein, a former Afterpay Director and Operating Partner at growth equity firm Stripes, to serve as its Board of Directors. Before joining Stripes, Ms. Rothstein held several senior marketing and brand management positions with leading global brands including Sephora, Starwood Hotels and Resorts, and Procter & Gamble before serving on the executive team as Global Chief Marketing Officer and Global Chief Product Officer at Starbucks Corporation.
“I’ve long admired Block’s purpose to make the financial system more accessible and inclusive. I’m honored and excited to bring my global experiences to the diverse expertise of this Board,” said Ms. Rothstein.
“We’re excited to welcome Sharon to our Board. Sharon’s expertise in marketing and global operations make her a great fit for Block as we move into this next growth phase with Afterpay,” said Mr. Dorsey. “We’d also like to thank all of the members of the Afterpay Board for their contributions to the business and the transaction.”
Block will release financial results for the fourth quarter and full-year 2021 on February 24, 2022, after the market closes.
Block price target lowered to $230 from $320 at BTIG
On January 26, 2022, BTIG analyst Mark Palmer lowered the firm’s price target on Block to $230 from $320 but kept a Buy rating on the shares as part of a broader research note on Financials. The analyst says the reduced price targets reflect the decline in equity multiples that have occurred in recent weeks among growth stocks even though he views many of these declines to be “excessive” in pricing in higher interest rates and other macroeconomic headwinds.
Block price target lowered to $210 from $285 at Mizuho
On January 25, 2022, Mizuho analyst Dan Dolev lowered the firm’s price target on Block to $210 from $285 and kept a Buy rating on the shares. The analyst believes payments stocks “could rebound sharply” in the second half of 2022 as the sector’s two-year revenue growth stack will likely inflect positively. His analysis of nearly 50 payments stocks shows that performance closely tracks the sector’s two-year sales growth stack.
Square and Ally Team Up to Streamline Transactions and Delivery Opportunities for Businesses
On January 18, 2022, Ally, Inc. announced a brand-new collaboration with Square, Inc. (NYSE: SQ) (now Block Inc.), the globally trusted software, payments, and hardware solution for businesses of all sizes. Through this partnership, Ally and Square will offer a restaurant, retail, and eCommerce businesses a fully integrated suite of tools designed to maximize profits, reduce costs, and streamline deliveries to loyal customers.
Ally is a Software-as-a-Service (SaaS) platform focused on solving many issues that arise with everyday transactions. From third-party data resellers to high transaction fees, platform commission structures to insufficient customer satisfaction, restaurant, and retail businesses are fighting an uphill battle as customer needs continue to expand and evolve. Ally provides businesses of all types with a comprehensive suite of software tools designed to help them increase revenue, drive down costs, and build lasting relationships with customers.
Ally’s network of over 90,000 qualified drivers has transformed the delivery process as well, offering more efficient and accurate deliveries for a wide variety of businesses, including retail, pharmacies, and fast-food establishments. Currently, 500+ brands are utilizing Ally’s tools.
Square provides POS systems that help sellers manage inventory, locations, employees, engage customers, and grow sales. Through the integration with Square, Ally customers can use Square’s payment processing tools and other features, such as payroll and customer loyalty programs, for a cohesive ordering and fulfillment platform. This powerful integration ensures that restaurants and retail stores can use their existing equipment and scale operations to meet industry and customer demands.
Block price target lowered to $200 from $240 at Jefferies
On January 12, 2022, Jefferies analyst Trevor Williams lowered the firm’s price target on Block to $200 from $240. He kept a Buy rating on the shares, citing, among other factors, the impact to high-growth multiples from a rising 10-year bond yield. He is taking a more selective approach to 2022 in Payments, Processors & IT Services as “the competitive disruption narrative may take a breather,” Williams added. For Block, the near-term view is still challenged until FY22 estimates are re-based, but he views the current entry point as highly attractive for long-term investors, said Williams, who adds that Block remains one of his top picks despite seeing a need for a Q4 “clearing event.”
📺 Game OVER for Square Stock!? (aka Block)
📉 SQ Stock Technical Analysis
The short-term trend is negative, as is the long-term trend. SQ is part of the IT Services industry. There are 153 other stocks in this industry, of which 75% are performing better than SQ. SQ is currently trading near the lower end of its 52-week range, which is not a good sign. The S&P500 Index is trading in the upper part of its 52-week range, so SQ is lagging the market.
There is support at 110.38 from a horizontal line in the weekly time frame.
There is a resistance zone ranging from 127.61 to 128.28. This zone is formed by a combination of multiple trend lines and important moving averages in the daily time frame. There is also resistance at 248.87 from a horizontal line in the daily time frame. Finally, there is resistance at 276.57 from a horizontal line in the weekly time frame.
The technical rating of SQ is bad and it also does not present a quality setup at the moment. SQ stock has a Setup Rating of 2 out of 10. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when SQ stock consolidates and has a Setup Rating of 8 or higher.