Why Square Stock Wilted on Wednesday

What happened

On a Wednesday, Square (NYSE:SQ) was a laggard of a stock. It closed down 1% despite news of a complementary new acquisition.

So what

Square, an ever-ambitious financial services company that likes to grow with small but useful asset buys, announced it has acquired privately held Crew. This is described by its new owner as “a frontline employee platform for consolidating and streamlining the day-to-day operations of hourly workforces.”

Small store with Square terminal at the desk.

Image source: Square.

Such workforces are common to clients who use Square’s payment system, the core market for which remains small businesses like restaurants and cafes. The company has done a fine job over the years adding functionalities onto its ecosystem, making it a compelling proposition for businesses looking to handle a number of tasks without using a multitude of solutions providers.

Square wrote in the press release trumpeting the Crew deal that “Unified team communication has long been a top feature request of Square sellers, and with the addition of Crew, Square will be able to accelerate its labor management roadmap to meet the evolving needs of today’s business owners.”

Now what

While owning Crew gives Square an asset that makes its ecosystem that much more compelling, the buyer hasn’t released the leading terms or the price of the deal. Nor has it given any estimates as to how it might impact its financials.

READ:  Have We Reached Streaming Video's Peak?

Investors like to know how much their companies are sacrificing for their acquisitions, and how these could pay off down the road. They haven’t been informed in this case, which is perhaps why Square stock dipped today. 

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.

View more information: https://www.fool.com/investing/2021/07/14/why-square-stock-wilted-on-wednesday/

Xem thêm bài viết thuộc chuyên mục: investing

Related Articles

Leave a Reply

Back to top button