Market Overview

Square's Downward Pressure Continues

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Square's Downward Pressure Continues

Traders heads are probably spinning watching Square Inc (NYSE: SQ) this year. The stock opened 2019 trading around $78 per share. In June, it was trading at around $62 and then rose above $80 by late July.

Investors appeared to be building a position before Square’s quarterly earnings report on Aug. 1, but Square reported disappointing year-over-year sales results and the stock dropped nearly 20%.

"The stock went from $10 to $100 in two years and now needs time to digest that huge move. I still like the company but it needs time to build a new technical base and let their earnings catch up to its valuation," Joseph Fahmy, Managing Director of Zor Capital, told Benzinga. "I have no position in this stock."

Take A Look Up North

Square powers many small businesses retail point-of-sale systems and independent contractors who accept payment. Square has also invested in the crypto space. The interesting thing with Square is that one of its competitors is Canadian-based Shopify Inc (NYSE: SHOP); while Square has dropped close to 20% in August, Shopify has risen 23%.

Shopify has chosen to focus on powering online stores, while Square has focused on physical retail. One question Square investors may be pondering: will it start focusing more on digital retailers or will more brick-and-mortar small businesses start using Square?

Square's stock traded down 1.3% to $61.94 at time of publication. It has a 52-week high of $101.15 and a 52-week low of $49.82.

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