Square Inc. (NYSE:SQ) stock had dropped over 6% on Monday morning, as BTIG Research downgraded the stock. The company recently began testing the transferring of Bitcoin and since then it had made the shares far too expensive.
The stock has tripled since the first quarter and has grown over 22 percent since launching the Square Cash App earlier this month. This app allows its users to buy and sell Bitcoin, which is highly volatile. These gains in their stock put its prices sky high above BTIG’s 12-month target of $30.
BGIT said in a statement:
“[W]e believe [Square’s] valuation already reflects emphatic and unimpeded growth while failing to factor in competitive, credit-related and macro risks that did not go away when some investors suddenly viewed its shares as a play on a trendy cryptocurrency.”
The company does not believe that it is optimal for the company to have its fortunes tied to cryptocurrency that is highly volatile.
Square’s stock hit an all-time high of $48.86 Friday, which made it up 258.8 percent for the year.
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