Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Square Is Plunging on Monday

By Matthew Frankel, CFP® - Updated Nov 19, 2018 at 1:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite a lack of news, the fintech company is down nearly 10%.

What happened

Payment processing and fintech company Square (SQ 3.97%) is having an absolutely dreadful Monday. As of 1:30 p.m. EST, the stock is down by about 10% and is hovering just above the lows of the day.

While Square has been on a downtrend over the past month or so, previous moves of this magnitude have generally had a clear downward catalyst. Today, however, that doesn't seem to be the case -- there's no major news involving Square.

Square Terminal on the counter of a bakery.

Image Source: Square.

So what

Square shareholders did get a bit of bad news last week when it was announced that CFO Sarah Friar, who recently decided to leave Square, would be departing earlier than expected in order to spend time with her family. While CEO Jack Dorsey had originally told employees that Friar would remain as CFO "into December to ensure a smooth transition," Friar's last day ended up being last Friday, Nov. 16.

This could certainly be taken as a disappointment but is unlikely to be the cause of today's move -- especially since it was announced last Thursday and has had time to be digested by investors.

Rather, today's move seems to be mainly fueled by the sell-off in technology and tech-related stocks. As of 1:30 p.m. EST, the tech-heavy Nasdaq Composite is down by almost 3% for the day, with many of the more volatile high-growth tech names (like Square) getting hit particularly hard, despite a lack of news.

Now what

Moves like this can be especially nerve-wracking for investors, especially when there is no clear reason for the downward momentum. However, long-term investors should simply take a deep breath and realize that moves like this have little to do with the company's long-term investment case. If anything, think of this as Square going on a sudden 10%-off sale.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Block, Inc. Stock Quote
Block, Inc.
SQ
$63.90 (3.97%) $2.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.