Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Shift4 Payments Fell Today

By Bram Berkowitz – Oct 28, 2021 at 4:39PM

Key Points

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

The company reported an October business update, while other industrywide news may have had something to do with the decline as well.

What happened

Shares of the payment processing company Shift4 Payments (FOUR 2.90%) fell nearly 11% today. There seems to be some news surrounding the company and potentially driving the move.

So what

The company released a brief update on October payments volume, saying payments volume in October grew 80% from October 2020, while active merchant counts have jumped 25% on a year-over-year basis. But seeing as this is good news, it is unlikely to have driven the stock down.

What seems to be driving the dip has to do with recent news regarding an FBI raid of the U.S. operations of the Chinese company Pax Global Technology, a maker of payments terminals.

Pax sells these terminals to companies all over the world. The cybersecurity website KrebsOnSecurity reported that the FBI raid may be related to the potential role of Pax-manufactured terminals in cyberattacks on companies in the U.S. and European Union.

Cylinders lined up in a descending fashion left to right.

Image source: Getty Images.

Now what

Right now, other than the fact that PAX and Shift4 are in the payments space, I am unsure how this impacts Shift4, which in general should be a recovery play. The stock at one point today fell nearly 20% but clawed back about half of the loss.

Any time the government or regulators get involved, things can get a little dicey, so investors may have just gotten scared. I expect the news regarding Pax may be brought up at Shift4's earnings call on Nov. 10, so be sure to tune in to learn more.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Shift4 Payments, Inc. The Motley Fool has a disclosure policy.

Premium Investing Services

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