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Why #Squarepocalypse Isn’t a Real Concern to Square Stock

On Jan. 4, Square (NYSE:SQ) chief executive officer Jack Dorsey converted 100,000 Class B shares into Class A shares and then sold the Square inventory at an average cost of $219.53.

Why #Squarepocalypse Is no Real Concern to Square Stock

The stock sale is actually part of planned sales by the billionaire co founder. He soon started the weekly sales of 100,000 shares on Nov. 16. Since then, he has sold 700,000 shares through his latest divestiture on Jan. 4.

To estimate the entire sales, he likely generated $160 million in pre-tax proceeds. Heck, even billionaires have bills to pay.

When you’re contemplating selling based on these planned sales, don’t. Square’s got lots of space to run in 2021.

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Square Stock Hits $300 Square stock is right now trading at more than $240. Since Jan. 1, the stock is up more than 10 %.

And that is on top of the 245 % gains it attained in 2020, something I’d a suspicion would happen. Here’s what I published on Jan. three, 2020:

Since Q3 2017, Square’s GPV [gross payment volume] from sellers with an annual GPV of around $500,000 grew 700 basis points to twenty seven %. Meanwhile, those sellers with a yearly GPV of less than $125,000 fallen 700 basis points to forty five %. At the same time, sellers with between $125,000 and $500,000 in GPV increased by 100 basis points to 28 %. Exactly why is this critical? It shows that the company’s revenue is now far more diversified; it now gains from fee processing across businesses of all the sizes.

How’s it doing a year later on this front?

In the third quarter of 2020, sellers with yearly GPV greater than $500,000 accounted for 30.6 % of the $28.8 billion in seller GPV. That is up 270 basis points from the previous year. Sellers with yearly GPV between $125,000 and $500,000 were $8.7 billion in Q3 2020, or 10.1 % higher than in the third quarter a year earlier. These two groups accounted for 61 % of seller GPV within Q3 2020, 500 basis points higher compared to the prior 12 months.

Without a doubt, sellers with annual GPV below $125,000 still accounted for thirty nine % of general seller GPV, however, it shows bigger companies’ acceptance fee, which happens to be important to its constant growth.

To get to $300 sooner in 2021, 2 things have to hold growing: Cash App, its finance app, and then Square Capital, its lending platform.

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