Share in rally mode: Wirecard competitor Square: what is it about the payment boss of the Twitter boss? | message

— Square shares have gained 110 percent since mid-March

Sales increase of more than 25 percent in Q1

Wirecard shares are listed at the corona crash level

The American software developer and entrepreneur Jack Dorsey seems to have a golden hand for successful companies. In 2006 he founded the short message service Twitter together with the co-founders Evan Williams and Biz Stone. The microblogging service currently has 166 million active users a day worldwide and a market capitalization of over $ 25 billion.

Jack Dorsey – the entrepreneur with the golden hand

Unlike many other founders, Dorsey did not rest on his laurels for long, however, and founded the financial services and mobile payment company Square with Jim McKelvey just three years after the launch of Twitter.

Square offers its customers various software and hardware products that accelerate and simplify traditional payment transactions. In the hardware segment, for example, the group sells small credit card readers for self-employed, small businesses, doctors and restaurants, which only need to be connected to an iPhone or an iPad. The respective customer can then easily pay with his credit card and simply sign with his finger on the touchpad. For the users, i.e. the company owners, this system has the advantage that all their customers’ invoices are evaluated on the PC immediately after the payment process and the receipts can be sent directly to the buyer by email.

The Dorsey payment group of course also offers its customers various software solutions to match their in-house hardware. In addition to invoicing, Square programs can also be used to monitor and process pay slips, bookkeeping and loans.

The Square share runs away from Wirecard

With a share price of over $ 80, the payment service provider Square has a current market capitalization of around $ 36 billion. Thus Dorsey’s second successful group trumps not only the market value of Twitter, but also that of the German payment competitor Wirecard.

Because at a price of around 85 euros, the people of Aschheim currently only have a market capitalization of just over 10 billion euros and are therefore almost 60 percent below their all-time high of summer 2018. With a share price of $ 80 they are listed Square shares, on the other hand, are only around 18 percent below their all-time high, which was also reached in summer 2018. Despite this fact, the US payment company is currently in the middle of a breathtaking rally. The share has already risen by more than 110 percent since its Corona low of March 16. Wirecard’s share certificates, on the other hand, are still around three percent below their corona crash level.

Square shines with sales growth and future prospects

However, according to the figures for the first quarter of 2020, no one should be surprised that Square’s shares are currently in a pronounced rally mode. The Dorsey Group achieved total sales of $ 615.9 million in the first three months of the year. Compared to the same quarter of the previous year, this corresponds to an increase in sales of 25.94 percent, because in the first quarter of 2019 the company’s earnings were still at $ 489.1 million.

Square can not only inspire its shareholders with phenomenal sales growth, but also with new growth and future prospects. The US group has been offering its customers the option of trading shares for free using the in-house cash app for several months. Square’s investment app even allows customers to buy a fraction of a stock. Accordingly, users can purchase shares from, for example, Amazon, Apple and Co. with just one US dollar.

The company also announced on March 18, 2020 that it has received approval to operate as an industrial bank. This new unit, which will be called Square Financial Services, is not expected to be launched until 2021.

Dorsey has always fought against the giants of the industry

Square is now one of the top 10 payment groups in the United States behind Visa, MasterCard, PayPal and American Express. As a result, the group faces many large competitors, especially in retail and small businesses. With cash and cash equivalents of over $ 2.1 billion and another billion in the form of a convertible bond, which was issued in March, the group has enough capital to buy smaller financial technology companies in the future and thus continue to grow.

In addition, Jack Dorsey has already proven on Twitter that he doesn’t have to take the industry lead to make a decent profit. Twitter has been swimming in the wake of Facebook for years and still generates high sales and new users.

Pierre Bonnet / editors finanzen.net

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