Friday, December 9, 2022

Square Stock Price Drops Four Percent After Citron’s Bitcoin “Nonsense” Call

Square Stock Price Drops Four Percent After Citron’s Bitcoin “Nonsense” Call

The share price of San Francisco-based credit card processing giant Square dropped by about four percent after Citron Research, an online stock commentary website, criticized Square’s bitcoin trading solution as hyperbolized. The online stock commentator also made a short call on Square stocks, which led to a further drop in value.

Also see: Crypto Exchange Bitfinex Adds Verge (XVG), Stellar (XLM) for Trading

Join the Bitsonline Telegram channel to get the latest Bitcoin, cryptocurrency, and tech news updates:

Citron Research Short Call Is Baseless

On April 30th, Citron Research tweeted:

As per Andrew Left’s Citron Research, Square Cash to bitcoin trading has been negligible. In the first quarter, most of the crypto market was hit severely, leading to Citron’s call. However, bitcoin trading is envisaged to grow in the second quarter. Popular Wall Street analyst Tom Lee has predicted the bitcoin price to hit $20,000 USD by mid-year.

After Citron Research’s criticism, Square Inc’s share price dropped by 3.8 percent. However, most of the losses were regained in the same day, resulting in a loss of only 0.48 percent at the close of trade. In the end, Citron’s comments failed to have a major impact on the payment processor’s stocks.

Citron Research also set a $30 short-term price target for Square stock, which would be around 35 percent below its Friday close. Moreover, the stock commentator highlighted that the company’s revenue is growing at a slower pace than social media giant Facebook. The commentary did not stop there, dubbing the company a “collection of yawn businesses.”

On the contrary, on April 18th shares of the company spiked five percent after Nomura’s Instinet analyst Dan Dolev stated that the bitcoin trading facility on the app could give a “sizeable boost” to its revenue. Dolev has set the price target to $65, predicting that growth in bitcoin trading could benefit the company. Square’s stock price has increased 34 percent since the start of the year.

Dorsey Positive on Bitcoin

Last year, bitcoin popularity reached new heights and numerous institutional investors were dipping their toes into the crypto waters. Earlier this year, the payments company introduced bitcoin trading for all users on the Square Cash app.

At the time, Square Inc founder Jack Dorsey tweeted:

Earlier, Dorsey asserted that bitcoin could become a global currency in ten years time, though he conceded that, at present, bitcoin lacked the capabilities and needed to scale up to become the global medium of exchange.

Can bitcoin be the driving force behind Square’s growth? Share your views in the comments section below.

Images via Pixabay 

Subscribe to the Bitsonline YouTube channel for more great interviews featuring industry insiders & experts

Bitsonline Email Newsletter