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Square stock drops 10%, is now less than IPO price

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Re: Square stock drops 10%, is now less than IPO price

#11

Post by atom_enger »

mdjt wrote: post #9
atom_enger wrote: post #2

Can someone help explain what this means? Is there something about Square that we can attribute this to? Did they make a mistake? Were they overvalued to begin with? I've spent the last year trying to understand the whole private-to-public process and I'm curious what this means for Square and other companies like Etsy who are experiencing the same drop in stock price.

I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%. Don't be wary ;)

Interesting that a drop in oil price would correlate. Why is this and how does it impact a completely unrelated industry?

Re: Square stock drops 10%, is now less than IPO price

#12

Post by mdjt »

atom_enger wrote: post #11
mdjt wrote: post #9

Earlier quoted context omitted.

I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%. Don't be wary ;)

Interesting that a drop in oil price would correlate. Why is this and how does it impact a completely unrelated industry?

IMO nothing is unrelated when it comes to the markets. A fall in a primary sector of the economy will lead to uncertainty in every other sector.

Re: Square stock drops 10%, is now less than IPO price

#13

Post by gtrubetskoy »

All the food trucks, street and market vendors, estate and yard sales, handymen, etc I see accept credit cards using Square. If they figure out how to hang on to this market and grow as these little vendors grow then they're in good shape. Being down 10% when the Dow is down 400+ points for days on is not unusual.

The big question is - who is Square competing with.

Re: Square stock drops 10%, is now less than IPO price

#14

Post by haldean »

dantillberg wrote: post #7

Well, the NASDAQ[0] and DJIA[1] are both off 3% for the day right now, along with every other index around the world. Or, to talk about price movements that are probably a bit more noteworthy, crude oil futures on NYMEX[2] are down ~7%. It's been kind of a (minor) bloodbath so far in the markets today. So, a 10% drop for a young, growth-oriented company is not terribly surprising on a day like today, I'd think. 0: ht…

Tech looks like it might be doing a little worse than the rest, too: https://www.google.com/finance?catid=us-TRBC%3A57&sort=MARKE...

Re: Square stock drops 10%, is now less than IPO price

#15

Post by dantillberg »

atom_enger wrote: post #11
mdjt wrote: post #9

Earlier quoted context omitted.

I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%. Don't be wary ;)

Interesting that a drop in oil price would correlate. Why is this and how does it impact a completely unrelated industry?

I'm not an economist, but my understanding is that the price of oil does not directly impact the valuation of these companies, per se, but that growth-oriented companies (especially) and oil sales depend on a strong global economy.

When the price of oil falls, that indicates that people are pulling back on oil/gas/etc purchases due to constrained budgets, reduced business/operations, etc. (and/or that people buying the oil predict that others will cut back on those things in the near future)

Re: Square stock drops 10%, is now less than IPO price

#18

Post by minimaxir »

gtrubetskoy wrote: post #13

All the food trucks, street and market vendors, estate and yard sales, handymen, etc I see accept credit cards using Square. If they figure out how to hang on to this market and grow as these little vendors grow then they're in good shape. Being down 10% when the Dow is down 400+ points for days on is not unusual. The big question is - who is Square competing with.

> If they figure out how to hang on to this market and grow as these little vendors grow then they're in good shape.

Now that Square is a public company with shareholders, the Silicon Valley mantra of growth-at-all-costs no longer generally applies, instead the focus is on profitability/ROI. Which is something that Square lacks, and is in an industry with slim margins already.

Re: Square stock drops 10%, is now less than IPO price

#19

Post by boomzilla »

dantillberg wrote: post #7

Well, the NASDAQ[0] and DJIA[1] are both off 3% for the day right now, along with every other index around the world. Or, to talk about price movements that are probably a bit more noteworthy, crude oil futures on NYMEX[2] are down ~7%. It's been kind of a (minor) bloodbath so far in the markets today. So, a 10% drop for a young, growth-oriented company is not terribly surprising on a day like today, I'd think. 0: ht…

Well, for some people, myself included, the not-going-so-well recent IPOs (Square, Box, etc.) would help deflate the pressure on housing prices in SF/BA. I feel for the workers at these company, but it's becoming impossible to raise a family here when the rent/mortgage is creeping up to more than half of most people's salary.

Re: Square stock drops 10%, is now less than IPO price

#20

Post by marrone12 »

gtrubetskoy wrote: post #13

All the food trucks, street and market vendors, estate and yard sales, handymen, etc I see accept credit cards using Square. If they figure out how to hang on to this market and grow as these little vendors grow then they're in good shape. Being down 10% when the Dow is down 400+ points for days on is not unusual. The big question is - who is Square competing with.

The big competitors are Shopkeep and Revel. However, neither of them are public and likely aren't going to soon given the state of the industry.
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