Square Is Down About 15% From the Highs -- Is it Time to Buy? | Summary and Q&A

TL;DR

Square is now allowing customers to pay for larger purchases in monthly installments, adding a new payment option for their small business partners.

Key Insights

• 👻 Square is expanding its offerings with a new payment option, allowing customers to pay in installments for larger purchases.
• 👾 This move represents Square's first step into the consumer lending space.
• 💳 The payment option carries credit risk, similar to store credit cards with higher default rates.
• ⏯️ Square's use of data from its hardware and software systems may play a role in mitigating potential risks.
• 🎁 The recent share price decline, prompted by CEO Jack Dorsey's pre-planned sale of shares, may present a buying opportunity.
• 🫵 Insider selling should be viewed as part of compensation and may not necessarily reflect the CEO's sentiment toward the company.
• 🙈 The long-term impact of Square's new payment option and its potential success in consumer lending remains to be seen.

Transcript

Jason Moser: Let's talk about Square. A couple of things out there. One thing, I'd seen they were dabbling in this and it was probably going to become something they would pursue. They're now letting customers pay in installments. They've essentially introduced a new payment option for their small business partners, in order to let customers pay fo... Read More

Questions & Answers

Q: What is the new payment option that Square is introducing?

Square is now allowing customers to pay for larger purchases in monthly installments, creating a new payment option for their small business partners.

Q: What does Square's consumer lending opportunity entail?

Square's foray into consumer lending includes offering installment payments and potentially leveraging its Square Cash app to provide loans.

Q: Are there any risks associated with Square's new payment option?

Yes, there is concern about the credit risk involved, as this payment option resembles store credit cards with high default rates.

Q: Why did Square's stock experience a negative reaction after the announcement?

The added credit risk and potential impact on default rates may have contributed to the negative reaction in Square's stock.

Summary & Key Takeaways

• Square is offering customers the option to pay for larger purchases in monthly installments, ranging from $250 to $10,000.

• This move marks Square's first step into consumer lending and a potential opportunity to monetize its Square Cash app.

• However, there is concern about the added credit risk, as this payment option resembles store credit cards with higher default rates.