Square Hits All-Time High
Mar 30, 2016 16:50:00 (ET)
By Telis Demos
Square Inc. is now higher than at any time since its initial public offering.
After an all-time high close Tuesday, the stock surged 9.3% to $15.02, another record close and 24 cents above its prior intraday peak, which it hit on its first day of trading. Its new intraday peak today was $15.13.
This may be welcome news for the tech IPO market broadly, which has seen offering after offering pounded in the after markets, even after bankers slashed prices on the original deals. Square is now up 67% from its offering price.
It's not precisely clear what is driving Square to new heights. Square is now up 15% on the year. Volume on Wednesday was up quite a bit, with 5.1 million shares trading hands, well above the 60-day-average of 2.7 million. Chatter on Twitter and sites like Seeking Alpha is now quite positive, which suggests there might be some day-trader interest helping out.
Square has made a few product announcements recently, including getting into marketplace bank lending for customers. But that's a business that hasn't always been well-received by traders, with On Deck Capital down 25% year-to-date.
On Wednesday, Square launched tools for merchants to extend their Square relationships online, via an e-commerce API, putting it in a position to compete with the likes of Stripe and Braintree to be the web payments provider to more complex medium-sized businesses.
Also Wednesday, Mizuho Securities USA initiated Square with a "buy" rating and a $16 price target. Analysts Neil A. Doshi and San Phan wrote that "the company is leveraging its broad base of two million merchants" using its payments devices and should add revenue with bigger merchants and add profit with add-on services like lending and food delivery.
Square is coming off a quarter that saw it announce a higher-than-expected Ebitda profit target for 2016, though it also forecast slightly lighter-than-expected revenue growth. Whatever the driver, it seems like the narrative on the stock is improving rapidly.
(END) Dow Jones Newswires
March 30, 2016 16:50 ET (20:50 GMT)
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Clueless analysts can't figure out whats driving the recent SQ rally.
Its the new TV advertising campaign that has been going on for the last couple weeks or so. Investors traders are seeing the ads everyday and saying hmmm that looks like a good company to invest in. Been in SQ since the first day it traded. Opening day SQ dipped below $10 and had not been well received due to the fact that all the other IPOs prior to it had dismal performance. The IPO market badly needs a winner and this may just be the horse they are looking for. If it turns out to become a Walstreet darling momentum will carry it much higher than $16.
