Block Stock Slips as Jack Dorsey Steps In to Run Square Unit

text size

Shares in

Block

On Tuesday, the company slipped after announcing that the head of Square Pay’s division would be stepping down, with Jack Dorsey taking over. Any investor worries may be overblown, analysts said.

Block (ticker: SQ ) shares fell 1.2% in premarket trading on Tuesday after the company said Alyssa Henry, the head of Square’s division, has left the company, effective Oct. 2. Sales system Square, and “Buy now, play later” service after payment.

Jack Dorsey—the former Twitter CEO who founded Blok and serves as its chief executive and chairman—will serve as Square’s chief executive officer when Henry leaves, the company said. “Henry has worked at Block for more than nine years and has made significant contributions to the company during that time,” the group said in a filing with the Securities and Exchange Commission.

Investors appear to be a bit uncertain about leadership changes. But analysts at JP Morgan, led by Tian-Xin Huang, were optimistic.

While Henry’s departure naturally raises questions, it seems to be in line with the recent trend of fintech industry executives moving post-pandemic (we don’t believe Henry will go for another big job, she was at Amazon Web Services before the suspension),” the analysts wrote in a note. “We love that Dorsey is stepping in to directly lead Square Strategy, the business he co-founded in 2009.”

JP Morgan rated Block an overweight stock and set a $75 price target on the stock. Shares closed at $51.25 on Monday.

Broadly speaking, Huang’s team was upbeat about the block’s prospects following a recent meeting with the company’s investor relations team.

The analysts said they expect Square’s early success in vertical inbound and outbound sales to drive growth in 2024. Huang’s team added that the bloc – which outlined a new investment framework this year – was looking good and was optimistic about the company. Continue to gain efficiency and share more profitability indicators.

Moreover, due to the outage of Square earlier this month, JP Morgan analysts did not see a material financial impact beyond the brief period when the platform went dark, and no data was compromised.

Write to Jack Denton at [email protected]