In the fourth quarter last year, American financial technology firm Square’s (SQ) stock disappointed investors with a massive loss of 43.3%. Yesterday, the broader-market sell-off pressured the stock further, and it settled with about 8.4% losses. However, the stock surged today, erasing all of yesterday’s losses to ensure a solid start of 2019 for the company. Let’s see what’s drove today’s gains.
Key factor for optimism
Today, Square revealed that it had hired Amrita Ahuja as new CFO. According to Ahuja’s LinkedIn profile, she has been serving Activision Blizzard’s (ATVI) Blizzard Entertainment as its CFO for since March. She had served in different roles at Activision Blizzard since June 2010.
In a press release, Square said, “Amrita will start in January and will report to CEO Jack Dorsey.” In the release, the company’s CEO Jack Dorsey noted that “In Amrita, we have found an amazing, multidimensional business leader.” and she “brings the ability to consider and balance opportunities across our entire business, and she will help strengthen our discipline as we invest, build, and scale. She is willing to challenge herself and others has the courage to take principled risks, and is passionate about our customers and our purpose.”
In December, SQ refiled “its application for an industrial loan company charter, which it pulled in earlier this year to answer questions from regulators,” CNBC reported. The report added that the company plans to launch “Square Financial Services” to be able “to take federally-insured customer deposits.”
This new hiring could have given rise to investors’ expectations that Square is inching closer to its plans to offer banking services, which could be one reason the stock rallied today, apart from a steep broader-market recovery.
At 3:03 PM ET, Square stock was up 11.4% after posting the day’s high of $59.64, up nearly 14% from its previous session’s closing price. The stocks of peers (IWP) Paypal Holdings (PYPL), Shopify (SHOP), eBay (EBAY), and Amazon (AMZN) were also up 5.0%, 6.2%, 2.2%, and 5.2%, respectively.