what happened
Shares of Square (NYSE: SQ) fell 7.5% on Wednesday following the announcement of the results of the digital payments and financial services business in the fourth quarter.
Approximately
Square’s revenue rose 141% year-on-year to $ 3.2 billion, fueled by an increase in demand for it Bitcoin (CRYPTO: BTC) trading services. Excluding the Bitcoin business, the fintech leader’s revenue rose 23% to $ 1.4 billion.
Square’s share price withdrew on Wednesday. Image Source: Getty Images.
In particular, Square is becoming more profitable because it scales its operations. Gross profit increased 52% to $ 804 million, driven by a 162% increase in Cash App’s profit. Square’s very popular peer-to-peer payment platform has increased its monthly operating customers by more than 50% compared to the previous year.
Now what
The strong performance was apparently not quite enough for some investors. The expectations were perhaps just too high for the fintech star. Square’s share price has tripled over the fourth quarter report over the past year, and many investors have likely decided to take some profit off the table on Wednesday.
Square also announced that it has purchased an additional $ 170 million in Bitcoin. Together with the $ 50 million investment in October, Bitcoin now represents about 5% of Square’s total cash reserves. It is possible that some investors are worried about the increasing exposure to Square to the volatile cryptocurrency.