On Jan. 4, 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 cost of $219.53.
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The stock sale is part of planned sales by the billionaire co founder. He 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 total sales, he probably generated $160 million in pre tax proceeds. Heck, even billionaires have bills to pay.
When you are considering offering based on these planned sales, do not. Square’s got plenty of room to run in 2021.
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Square Stock Hits $300 Square stock is already trading at over $240. Since Jan. 1, the stock is up more than 10 %.
And that is along with the 245 % gains it attained in 2020, something I had a suspicion would happen. Here is what I published on Jan. 3, 2020:
Since Q3 2017, Square’s GPV [gross payment volume] from sellers with an annual GPV of over $500,000 grew 700 basis points to twenty seven %. Meanwhile, those sellers with a yearly GPV of under $125,000 dropped 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 %. Exactly why is this important? It implies that the company’s revenue has become a lot more diversified; it now gains from fee processing across organizations of all the sizes.
How’s it doing a year later on this front?
In the third quarter of 2020, sellers with annual GPV greater than $500,000 accounted for 30.6 % of the $28.8 billion in seller GPV. That is up 270 basis points from the previous 12 months. Sellers with yearly 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 2 groups accounted for 61 % of seller GPV in Q3 2020, 500 basis points higher compared to the previous year.
Of course, sellers with annual GPV less than $125,000 still accounted for 39 % of overall seller GPV, however, it shows bigger companies’ acceptance rate, that is critical to its constant growth.
To get to $300 sooner in 2021, 2 things have to keep growing: Cash App, the finance app of its, and then Square Capital, its lending platform.