Pushback On Square

Investment Analysis Clubs Saul’s Investing Discussions
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Square is dealing with really small guys, people who will go to once a week or once a month local markets to sell handcrafts, for instance.

SQ has been moving up market. Below is the GMV mix for the past 7 quarters.


GMV
(<$125K)  ($125-500K)	(>$500K)	
63%	  26%	        11%
57%	  28%           14%
52%	  27%	        20%
53%	  27%	        20%
53%	  27%	        20%
50%	  28%	        22%
48%	  28%	        24%

SQ’s growth has been accelerating for the past 5 quarters.
SQ is now profitable although they will spend more in 2019.
I think SQ’s stock could have dropped for the following reasons:

  1. bitcoin drop
  2. market selloff (yes Sq is off more)
  3. announcing that they will spend more on growth initiatives in 2019
  4. Sarah Friar leaving

If you just look at the growth numbers, it’s not a clear sell. Saul usually looks at the numbers. I haven’t sold any but I’ve found that about 75% of the time when Saul sells something, it was in hindsight a good decision. The next earnings call is on February 27th. I was planning to see how the company does before I see any shares.

Chris

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