Federal prosecutors are investigating financial transactions at Square Parent Block (SQ) including Cash App and bitcoin, according to a report. Square shares plunged, according to the report, a day before Square’s first-quarter earnings release.
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In today’s stock market, Square stock fell 8.4% to 66.85. Wednesday’s loss leaves SQ’s shares down about 13% in 2024.
According to an NBC news report, federal prosecutors are probing internal practices at Block, the financial technology company founded by Twitter co-founder Jack Dorsey, and discussing with a former employee alleged widespread and years-long compliance violations at its two main units the company, Square. and Cash App.”
The NBC News report also said, “Most of the transactions discussed with prosecutors, involving credit card transactions, dollar transfers and bitcoin, were not reported to the government as required.”
At its core, Square Stock operates a two-sided digital payments ecosystem, with products designed for both merchants and consumer buyers.
Short-seller Hindenburg Research alleged last year that Block inflated Cash App’s user statistics and enabled fraud.
Square share: first quarter profit expected
First-quarter earnings for Square stock are expected after the market close on Thursday. Analysts expect adjusted earnings to rise 80% to 72 cents per share. Analysts polled by FactSet expect revenue to rise 17% to $5.83 billion, including Cash App transactions.
Wall Street analysts also consider gross profit and earnings before interest, taxes, depreciation (EBITDA) and depreciation as important metrics for the digital payments company. Analysts predict gross profit of $2.02 billion and EBITDA of $591 million.
Additionally, Square stock has an entry point of 80.29 from a cup basis. Additionally, SQ’s stock is trading well below its 50-day moving average.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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