Block (SQ) is coming back strong.
On March 23, we noted, “The stock took a $10 header on a Hindenburg short report allegation that Square has ‘systematically taken advantage of the demographics it claims to be helping.”
Today, the stock is up about $3.56. And it looks like most of the negativity has been priced into the stock. Plus, analysts are out in defense of the SQ stock.
For one, as noted by TheFly.com: While Bank of America says the report likely creates a near-term overhang for shares, its initial reaction is that shares are “likely oversold.” The firm also reiterated its Buy rating and $96 price target on shares of Block.
As reported by Yahoo Finance, Truist analyst Andrew Jeffrey said: “We have known Block’s management team for years and have confidence in the way the [company] discusses, manages, and discloses details about its Cash App business. While we think Cash App incurs some fraud, like any other P2P payment app, we find it highly unlikely that one of the most sophisticated FinTechs in the US is running rampant with systemic fraud.”
Keybanc analyst Josh Beck: “In summary, we see no merit to the disparaging claims and rather view the report as observations from a relative novice industry outsider who is not familiar with standard operating practices and principles within the FinTech industry or the broader regulatory construct.
At the moment, SQ is up $3.56 on the day at $64.24. From here, we’d like to see the stock refill its bearish gap around $72.50.
