Block (SQ) is starting to show big signs of life again.
Just days ago, the SQ stock took a $10 header on a Hindenburg short report allegation that Square has “systematically taken advantage of the demographics it claims to be helping.”
As noted by Yahoo Finance; The short seller accuses Block of a “willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as a revolutionary technology, and mislead investors with inflated metrics.”
However, it looks like most of the negativity has been priced into the stock. Plus, analysts are out in defense of the SQ stock.
As reported by Yahoo Finance, Truist analyst Andrew Jeffrey said: “We have known Block’s management team for years and have confidence in the way the [company] discusses, manages, and discloses details about its Cash App business. While we think Cash App incurs some fraud, like any other P2P payment app, we find it highly unlikely that one of the most sophisticated FinTechs in the US is running rampant with systemic fraud.”
Keybanc analyst Josh Beck: “In summary, we see no merit to the disparaging claims and rather view the report as observations from a relative novice industry outsider who is not familiar with standard operating practices and principles within the FinTech industry or the broader regulatory construct.
From a current price of $64.12, we’d like to see SQ refill its bearish gap of around $72.50.