Please ensure Javascript is enabled for purposes of website accessibility

Square: 2 Reasons to Be Cautious Now

By Matthew Frankel, CFP®, Toby Bordelon, and Trevor Jennewine – Updated Nov 1, 2021 at 10:25AM

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

There's a lot to like about the fintech giant, but it helps to consider the other side.

Many investors are big fans of Square (SQ 2.67%), and that includes Motley Fool contributors Matt Frankel, CFP®, Trevor Jennewine, and Toby Bordelon. However, it can help to take a step back and talk about some things you don't like about a particular company. In this Fool Live clip, recorded on Oct. 18, the trio does just that by mentioning two things in particular about Square that are causing them to pay a little more attention.

10 stocks we like better than Square
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Square wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of October 20, 2021

 

Trevor Jennewine: This is one of my larger holdings. It's not in my top three, but I love how they've expanded their business. In one of their recent shareholder letters, they mentioned the acquisition costs for each Cash App user was less than $5. So much I've seen. Banks acquisition cost is about $1,500 per person. Just so much potential and I really like how they've expanded their ecosystem.

Toby Bordelon: Yeah, I think that's right. I own this company. Again, it's one of my larger holdings. They've been impressive. It has been really impressive. It's how they keep doing in different areas and expanding beyond that initial core idea. What's the big acquisition?

Matt Frankel: Afterpay.

Bordelon: Afterpay. Now, I have concerns about that whole industry buy now, pay later. It's interesting to the see them getting into that via acquisition, and with the leader in Australia is how they're doing that.

Frankel: We're a bit concerned they might be overpaying a little bit.

Bordelon: That's certainly a valid concern. I can't remember the premium.

Frankel: $29 billion.

Bordelon: Yeah, very welcome to Afterpay shareholders, I guess you could say that. But I think they've got the money to do it.

Frankel: I'm not without concerns on Square albeit, at this stage, for example, and this is a very unpopular statement to make. I think Jack Dorsey's affinity for Bitcoin (BTC 3.76%) is probably my least favorite part of the company. They just keep doubling down and doubling down on various cryptocurrency related things, which I'm not that much of a fan. I'll let him have his a Bitcoin fun, the rest of the business is doing fantastic.

Trevor Jennewine owns shares of Square. The Motley Fool owns shares of and recommends Bitcoin and Square. 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.