Please ensure Javascript is enabled for purposes of website accessibility

Why Was Square Stock Falling on Wednesday?

By Matthew Frankel, CFP® - Updated Apr 14, 2021 at 6:23PM

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

Shares of the fintech were down sharply despite lots of cryptocurrency enthusiasm.

What happened

The stock market was having a mildly negative session on Wednesday, with the S&P 500 down by about 0.3% shortly before the end of the trading day. However, fintech giant Square (SQ 4.43%) was a notable underperformer -- as of 3:45 p.m. EDT, shares had fallen by more than 5%.

So what

This move might seem odd given all of the hype surrounding Bitcoin and other cryptocurrencies. Coinbase completed its long-anticipated direct listing today, and shares were trading for about 30% more than their initial reference price.

A hand holds a smartphone up to a Square register that's sitting on a counter next to a cup of coffee and a bagel display case

Image source: Square.

However, it seems like the hype faded throughout the session. At their peak, Coinbase shares had popped by more than 70%, so it's fair to say that investor demand for cryptocurrency-related stocks might be cooling off. And Square has a massive Bitcoin operation -- some estimates say that as much as one-fourth of all U.S. Bitcoin volume can be attributed to the Cash App.

Beyond that, it's also worth noting that many tech stocks are weak today. The Nasdaq is by far the worst performing of the three major indexes, and several other high-interest tech stocks are seeing similar declines.

Now what

On days like today, it's important to take a step back, especially since there doesn't appear to be any company-specific news fueling the move. And it's also important to remember that Square's stock is up by 334% over the past year, even after today's drop, so don't read too much into it.

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.
$66.73 (4.43%) $2.83
Bitcoin Stock Quote
$20,155.63 (-0.70%) $-141.14

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

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.