San Francisco-based payment service Square shares dropped after Citron Research called its Bitcoin strategy “nonsense” in a tweet Monday afternoon.
Shares of financial services and mobile payment company Square dropped Monday after a critical tweet by short-seller Andrew Left’s Citron Research, CNBC reported April 30. Citron claimed excitement for Square’s Bitcoin (BTC) trading solution was exaggerated.
Citron called Square a “collection of yawn businesses” in a tweet Monday afternoon, adding that the payment operator’s “SQ-Cash to BTC trading has been insignificant”. Immediately afterwards, Square’s stock dropped 3.8 percent to $45.76 per share. The price then recovered most of its losses and closed at 0.48 percent lower than its start-of-day value.
$SQ Short term tgt $30 started as innovative pymt co. – now just another processor. 15x rev growing slower than $FB. Collection of yawn businesses. WallSt drunk on Bitcoin nonsense, SQ-Cash to BTC trading has been insignificant. Even w/ hyper growth still 40% too rich
— Citron Research (@CitronResearch) April 30, 2018
Citron also announced a short-term target of $30, or 36.9 percent below Friday’s close.
Square’s stock price hasn’t seen significant changes since the company, founded by Twitter CEO Jack Dorsey, launched Bitcoin trading through its peer-to-peer Square Cash app in January. With the app, consumers can buy up to $10,000 of BTC a week with no selling limit.
Dan Dolev, a research analyst at Nomura Instinet, told CNBC that, “the Bitcoin impact [for Square] will be material long term.” Nomura Instinet had earlier set their price target for Square at $65.
In March, Jack Dorsey said that Bitcoin will become the world’s single future currency in about ten years. However, he reportedly doesn’t believe that BTC currently has the capabilities to become an effective medium of exchange due to its slowness and costliness.