Why #Squarepocalypse Is no Real Concern to Square Stock

On Jan. 4, Square (NYSE:SQ) chief executive officer Jack Dorsey converted 100,000 Class B shares into Class A shares and then sold the Square inventory at an average price of $219.53.

Why #Squarepocalypse Is no Real Concern to Square Stock

The stock sale is actually a component of planned sales by the billionaire co-founder. He soon began the weekly sales of 100,000 shares on Nov. 16. Since that time, he’s sold 700,000 shares through his latest divestiture on Jan. four.

To estimate the total sales, he probably generated $160 million in pre-tax proceeds. Heck, even billionaires have bills to pay.

When you’re considering selling based on these planned sales, do not. Square’s got ample space to run in 2021.

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Square Stock Hits $300 Square stock is already trading at more than $240. Since Jan. one, the stock is up more than 10 %.

And that’s on top of the 245 % gains it attained in 2020, something I had a suspicion would occur. Here’s what I wrote on Jan. three, 2020:

Since Q3 2017, Square’s GPV [gross transaction volume] from sellers with an annual GPV of over $500,000 grew 700 basis points to twenty seven %. Meanwhile, those sellers with a yearly GPV of under $125,000 fallen 700 basis points to forty five %. At exactly the same time, sellers with between $125,000 as well as $500,000 in GPV increased by 100 basis points to 28 %. Why is it important? It shows that the company’s revenue has grown to be far more diversified; it today gains from payment processing across businesses of all sizes.

How is it doing a year later on this front?

In the third quarter of 2020, sellers with annual GPV greater than $500,000 accounted for 30.6 % of the $28.8 billion in seller GPV. That’s up 270 basis points from the earlier year. Sellers with annual GPV between $125,000 and $500,000 were $8.7 billion in Q3 2020, or maybe 10.1 % higher than in the third quarter a year earlier. These 2 groups accounted for 61 % of seller GPV within Q3 2020, 500 basis points higher compared to the earlier 12 months.

Sure, sellers with annual GPV below $125,000 still accounted for 39 % of general seller GPV, but it shows bigger companies’ acceptance fee, which happens to be important to its ongoing growth.

To get to $300 sooner in 2021, two things have to hold growing: Cash App, the finance app of its, and Square Capital, its lending platform.