Square Shares Fall After Agreeing to Buy Payment Firm for $29 Billion, Posting Lower-Than-Expected 2Q Revenue
August 02 2021 - 7:32AM
Dow Jones News
By Dave Sebastian
Square Inc. shares fell 4.4% in premarket trading Monday after
the financial technology company agreed to buy payment firm
Afterpay Ltd. in an all-stock deal worth about $29 billion and
posted lower-than-expected revenue for the second quarter.
The financial-technology company on Sunday said a key attraction
of the deal was a growing wariness toward traditional credit among
younger consumers, a group particularly hard hit by the Covid-19
pandemic, as lockdowns crushed many hospitality and casual jobs.
Afterpay's technology allows users to pay for goods in four,
interest-free installments while receiving the goods
immediately.
The company posted net revenue of $4.68 billion, up from $1.92
billion in the comparable period last year. Analysts polled by
FactSet were looking for $5.03 billion.
Transaction-based revenue rose to $1.23 billion from $682.6
million, and bitcoin revenue rose to $2.72 billion from $875.5
million.
The company posted net income attributable to shareholders of
$204 million, compared with a loss of $11.48 million in the
year-ago period. Earnings were 40 cents a share, compared with a
loss of 3 cents a share.
Adjusted earnings were 66 cents a share. Analysts were expecting
31 cents a share.
Shares were down after closing at $247.26 on Friday.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
August 02, 2021 07:17 ET (11:17 GMT)
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