Shares of mobile payment processor Square (NYSE:SQ) dropped today, down by 4% at the close, amid a broad market sell-off due to fears about the COVID-19 pandemic. Separately, Square announced a new delivery service and a Wall Street analyst released a bullish research note.
The U.S. is seeing sharp increases in new coronavirus cases in various states around the country. Investors had driven the stock market to new highs on hopes that the worst of the pandemic was in the rearview mirror, but moves to ease lockdown restrictions in order to reopen the economy are contributing to a startling resurgence.
If additional lockdowns are imposed again in response, Square's merchant base, which includes a lot of small and local businesses, would be adversely impacted. The stock also set fresh all-time highs yesterday, so some investors may be cashing out profits.
Square also announced a new on-demand delivery service for the Square Online Store in an effort to help merchants transition to online sales and e-commerce. Sellers can dispatch couriers from delivery partners to fulfill online orders. Postmates will be the delivery partner initially, with additional partners expected to join the program soon. Sellers will pay just a flat fee of $1.50 per order to Square in addition to a separate fee to the delivery partner based on distance and other variables.
Deutsche Bank also put out a research note reiterating a buy rating on Square shares and boosting its price target from $80 to $120.