What happened

The stock market was having a generally negative day on Monday, with the S&P 500 down by about 0.5% at 2:30 p.m. EDT. However, fintech-giant Square (SQ -2.28%) was a major underperformer, down by 5% on the day.

So what

The primary reason for today's decline is that Square announced plans to offer $2 billion in senior notes (aka debt) in a private placement to institutional investors. Square plans to use the money for "general corporate purposes."

Square payment terminal on a cafe counter.

Image source: Square.

It's not unusual for selling pressure to be seen when companies unexpectedly add debt to their balance sheets. And considering that the company had $3.7 billion in cash already at the end of the first quarter, this move might have investors scratching their heads. Including debt already on the books, Square will now have about $5 billion in long-term debt, more than five times its debt load at the start of 2020.

Now what

In addition to Square's debt offering, it's worth noting there has been quite a bit of selling pressure in the tech space in recent weeks, and that's certainly the case today. With a decline of about 1.3%, the tech-heavy Nasdaq is by far the worst performer of the headline indices. Plus, with Bitcoin (BTC 1.96%) falling sharply over the weekend, companies that have cryptocurrency operations are under additional pressure.

Not only does Square provide Bitcoin trading functionality through its Cash App, but it also owns about $360 million in Bitcoin itself. So it's fair to say that at least some of the pressure Square is under is being caused by these headwinds.