On Jan. four, Square (NYSE:SQ) chief executive officer Jack Dorsey converted 100,000 Class B shares into Class A shares and then sold the Square inventory at an average price of $219.53.
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The stock sale is actually part of planned sales by the billionaire co-founder. He soon started the weekly sales of 100,000 shares on Nov. 16. Since then, he’s sold 700,000 shares by using the latest divestiture of his on Jan. 4.
Estimating the entire sales, he probably generated $160 million in pre-tax proceeds. Heck, even billionaires have bills to pay.
When you are thinking about selling based on these planned sales, do not. Square’s got ample space to work in 2021.
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Square Stock Hits $300 Square stock is right now trading at more than $240. Since Jan. 1, the stock is up over 10 %.
And that’s along with the 245 % gains it attained in 2020, something I had a suspicion would occur. Here’s what I published on Jan. 3, 2020:
Since Q3 2017, Square’s GPV [gross payment volume] from sellers with an annual GPV of more than $500,000 grew 700 basis points to 27 %. Meanwhile, those sellers with a yearly GPV of only $125,000 fallen 700 basis points to 45 %. At the same time, sellers with between $125,000 and $500,000 in GPV increased by 100 basis points to 28 %. Precisely why is it important? It shows that the company’s revenue has become a lot more diversified; it now benefits from payment processing across businesses of all sizes.
How’s it doing a year later on this front?
In the third quarter of 2020, sellers with yearly GPV greater than $500,000 accounted for 30.6 % of the $28.8 billion in seller GPV. That’s up 270 basis points from the earlier 12 months. Sellers with annual GPV between $125,000 as well as $500,000 were $8.7 billion in Q3 2020, or maybe 10.1 % higher than in the third quarter a year earlier. These two groups accounted for 61 % of seller GPV within Q3 2020, 500 basis points higher than the earlier 12 months.
Sure, sellers with annual GPV less than $125,000 still accounted for 39 % of general seller GPV, although it shows larger companies’ acceptance rate, which happens to be important to its ongoing growth.
To get to $300 sooner in 2021, two things have to keep growing: Cash App, the finance app of its, and Square Capital, its lending platform.