When you think of SQ stock, cryptocurrency Bitcoin quickly comes to mind. There’s also a big acquisition to mull for Square stock as well as a corporate rebranding.
Amid rising fears of a U.S. recession, one question is how resistant Square-parent Block (SQ) will be to a business downturn versus other digital payment companies. If the Federal Reserve successfully engineers a “soft landing” for the U.S. economy, that would be a plus for Block stock.
Shares in Block plunged March 23 after Hindenburg Research disclosed a short position in SQ stock while claiming that the digital payment company facilitates fraud with Cash App consumer services.
In a press release, Hindenburg said the company has “systematically taken advantage of the demographics it claims to be helping.”
The release went on to say: ” Most analysts are excited about the post-pandemic surge of Block’s Cash App platform, with expectations that its 51 million monthly transacting active users and low customer acquisition costs will drive high margin growth and serve as a future platform to offer new products.”
But Hindenburg added: “Block has wildly overstated its genuine user counts and has understated its customer acquisition costs. Former employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual.”
Prior to the disclosure by Hindenburg, SQ stock had advanced 17% this year. Block traded near 90, on Feb. 2, but shares plunged about 61% last year.
In its core businesses, Square stock aims to build a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers. The Square Cash App helps individuals manage money, buy stocks and cryptocurrency, and more.
SQ Stock: International Expansion
“The three initiatives for the Square business are omni-channel, moving upmarket and global expansion,” UBS analyst Rayna Kumar said in a recent note to clients. “Mature international markets including Canada, U.K., Japan and Australia now have return on investment in line with…