On Monday, well-known short seller Andrew Left of Citron Research went hard on Square shares stating that the interest over its newly introduced bitcoin trading product was blown out of proportion. The app allows users transfer bitcoin from their mobile payment app almost immediately, which is a very luring feature for traders.
In a tweet released on Monday, Citron noted that Square is a “collection of yawn businesses,” going on to state that “Wall St. drunk on Bitcoin nonsense. SQ-Cash to BTC trading has been insignificant. Even w/ hyper growth still 40% too rich.” Citron went on to predict a $30 short-term price target on the stock, or 3.6 percent less than Friday’s close.
Square’s stock declines for a short while losing about 3.8 percent as the price dropped to $45.76 before bouncing back to make up for most of the mosses to close only 0.48 percent. The company still remains silent.
Shares were still the same since Square, operated by Twitter co-founder Jack Dorsey, and introduced bitcoin trading in January especially for users of its Cash mobile payments app.
Dorsey is still confident that bitcoin will outshine fiat money and come out as the “single currency” the world and internet in the years to come.
Dan Dolev, Nomura Instinet research analyst, echoed his stance that bitcoin’s influence will be “material” in years to come. Square received an improvement some weeks ago when Wall Street analysts noted that Bitcoin trading would strengthen the company’s quarterly results.
Dolev increased his price for Square to $65 on April 18, with the hope that introducing bitcoin trading it will lead to 10 percent adjustment in earnings before interest, taxes, depreciation, and amortization. Dolev believed Square could go through a “sizable boost” to its top-line and bottom-line results in the present quarter, which the company reports on May 2. He noted that between 2% and 6% of Square Cash customer’s trade bitcoin and this could strengthen Square’s adjusted revenue by 3%.