The Square Stock Selloff is an Overreaction
Shares of Square (NYSE: SQ) have dropped 28% from the beginning of August after the company reported lower payment volumes than originally projected, in addition to an adjustment in net profit per share. The recent sell-off was an overreaction on both counts and needs to be unpacked to see where investors may have thrown the baby out with the bathwater.
Square's projection of lower than expected net income per share was due to an investment in Eventbrite (NYSE: EB). In 2017, Square invested $25 million in Eventbrite. After the company decided to go public, Square's investment doubled in value as the investment converted into common stock.
DATA SOURCE: STOCKCHARTS.COM
Source Fool.com
