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Can someone help explain what this means? Is there something about Square that we can attribute this to? Did they make a mistake? Were they overvalued to begin

Can someone help explain what this means? Is there something about Square that we can attribute this to? Did they make a mistake? Were they overvalued to begin with? I've spent the last year trying to understand the whole private-to-public process and I'm curious what this means for Square and other companies like Etsy who are experiencing the same drop in stock price.

the-dude 11y ago
Well without reading up on Square: markets are in a downturn worldwide. Other remarkable tidbit: Shell now has a smaller marketcap than Unilever.
eitally 11y ago
They've made some questionable business decisions to spur growth and are being called to task. They haven't seemed to be able to grow effectively without deals like that, and the sector is becoming crowded. Here's one example: http://money.cnn.com/2015/10/15/technology/square-starbucks/ http://money.cnn.com/2015/10/15/technology/square-starbucks/
- refriedbeans3 11y ago
  That deal has been heavily touted as a terrible deal for square for years. As such was priced into the IPO price as well as the current valuation. That is basically the only bad deal you can point to that they are in.
cm2012 11y ago
For pretty much no reason, a bunch of players in FinTech that are sometimes lumped in with Square (since Square has a financing product) plummeted on the markets starting a week ago. Lending Club, OnDeck, Lending Tree, etc.
mdjt 11y ago
I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%. Don't be wary ;)
- atom_enger 11y ago
  Interesting that a drop in oil price would correlate. Why is this and how does it impact a completely unrelated industry?
  - mdjt 11y ago
    IMO nothing is unrelated when it comes to the markets. A fall in a primary sector of the economy will lead to uncertainty in every other sector.
  - dantillberg 11y ago
    I'm not an economist, but my understanding is that the price of oil does not directly impact the valuation of these companies, per se, but that growth-oriented companies (especially) and oil sales depend on a strong global economy. When the price of oil falls, that indicates that people are pulling back on oil/gas/etc purchases due to constrained budgets, reduced business/operations, etc. (and/or that people buying the oil predict that others will cut back on those things in the near future)
    - ZanyProgrammer 11y ago
      I'd think its because of the increased supply of oil.
  - brainflake 11y ago
    It's probably not just oil, but rather a general reduction of risk from investors. People are worried about the global economic climate and are pulling their money out of stocks and putting it into more predictable, dependable assets like gold and treasury bonds, which tend to have much lower yields but also much less risk of tanking in value during bad times.

the-dude 11y ago

Well without reading up on Square: markets are in a downturn worldwide. Other remarkable tidbit: Shell now has a smaller marketcap than Unilever.

eitally 11y ago

They've made some questionable business decisions to spur growth and are being called to task. They haven't seemed to be able to grow effectively without deals like that, and the sector is becoming crowded. Here's one example: http://money.cnn.com/2015/10/15/technology/square-starbucks/ http://money.cnn.com/2015/10/15/technology/square-starbucks/

refriedbeans3 11y ago
That deal has been heavily touted as a terrible deal for square for years. As such was priced into the IPO price as well as the current valuation. That is basically the only bad deal you can point to that they are in.

cm2012 11y ago

For pretty much no reason, a bunch of players in FinTech that are sometimes lumped in with Square (since Square has a financing product) plummeted on the markets starting a week ago. Lending Club, OnDeck, Lending Tree, etc.

mdjt 11y ago

I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%. Don't be wary ;)

atom_enger 11y ago
Interesting that a drop in oil price would correlate. Why is this and how does it impact a completely unrelated industry?
- mdjt 11y ago
  IMO nothing is unrelated when it comes to the markets. A fall in a primary sector of the economy will lead to uncertainty in every other sector.
- dantillberg 11y ago
  I'm not an economist, but my understanding is that the price of oil does not directly impact the valuation of these companies, per se, but that growth-oriented companies (especially) and oil sales depend on a strong global economy. When the price of oil falls, that indicates that people are pulling back on oil/gas/etc purchases due to constrained budgets, reduced business/operations, etc. (and/or that people buying the oil predict that others will cut back on those things in the near future)
  - ZanyProgrammer 11y ago
    I'd think its because of the increased supply of oil.
- brainflake 11y ago
  It's probably not just oil, but rather a general reduction of risk from investors. People are worried about the global economic climate and are pulling their money out of stocks and putting it into more predictable, dependable assets like gold and treasury bonds, which tend to have much lower yields but also much less risk of tanking in value during bad times.