Block (SQ) is coming back strong, as hoped.
On March 23, we said the stock took a $10 header on a Hindenburg short report allegation. But it didn’t take long for the stock to recover, quickly pricing in the negativity.
At the time, the stock traded at a low of $56.50. Today, it’s up to $68.18, and we still believe it could refill its gap around $72.50. Helping, Block recently said the short report was inaccurate, and that it would seek legal action against Hindenburg. Keefe Bruyette also just said Block’s response could get investors more comfortable with the stock.
Also, as noted by TheFly.com, DA Davidson analyst Christopher Brendler keeps a Buy rating and $130 price target. DA Davidson states that while the short seller has a “solid reputation” and deserves to be taken seriously, its analysis suggests the Hindenburg case is “considerably weaker than the market reaction implies.”
SQ last traded at $68.18 and could see $72.50 shortly.