-The stock market was having a generally negative day on Monday, with the S&P 500 down by about 0.5% at 2:30 p.m. EDT. However, fintech giant Square (NYSE:SQ) was a major underperformer, down by 5% on the day.
-The primary reason for the decline is that Square announced plans to offer $2 billion in senior notes (aka debt) in a private placement to institutional investors. Square plans to use the money for "general corporate purposes."
-It's not unusual for selling pressure to be seen when companies unexpectedly add debt to their balance sheets. And considering that the company had $3.7 billion in cash already at the end of the first quarter, this move might have investors scratching their heads. Including debt already on the books, Square will now have about $5 billion in long-term debt, more than five times its debt load at the start of 2020.
-With Bitcoin (CRYPTO:BTC) falling sharply over the weekend, companies that have cryptocurrency operations are under additional pressure. Not only does Square provide Bitcoin trading functionality through its Cash App, but it also owns about $360 million in Bitcoin itself. So it's fair to say that at least some of the pressure Square is under is being caused by these headwinds.
-The primary reason for the decline is that Square announced plans to offer $2 billion in senior notes (aka debt) in a private placement to institutional investors. Square plans to use the money for "general corporate purposes."
-It's not unusual for selling pressure to be seen when companies unexpectedly add debt to their balance sheets. And considering that the company had $3.7 billion in cash already at the end of the first quarter, this move might have investors scratching their heads. Including debt already on the books, Square will now have about $5 billion in long-term debt, more than five times its debt load at the start of 2020.
-With Bitcoin (CRYPTO:BTC) falling sharply over the weekend, companies that have cryptocurrency operations are under additional pressure. Not only does Square provide Bitcoin trading functionality through its Cash App, but it also owns about $360 million in Bitcoin itself. So it's fair to say that at least some of the pressure Square is under is being caused by these headwinds.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.