What happened
Actions of Square (NYSE: SQ) fell 7.5% on Wednesday after the fourth quarter results of the digital payments and financial services company were released.
And
Square’s revenue soared 141% year on year to $ 3.2 billion, fueled by an increase in demand for its Bitcoin (CRYPT: BTC) commercial services. Excluding its Bitcoin business, the lead fintech’s revenue increased 23% to $ 1.4 billion.
Square’s stock price fell on Wednesday. Image source: Getty Images.
Notably, Square is becoming more profitable as it scales its operations. Its gross profit jumped 52% to $ 804 million, driven by a 162% increase in Cash App profits. Square’s extremely popular point-to-point payment platform saw its active monthly transaction customers increase by more than 50% in compared to the previous year.
What now
The strong performance was apparently not enough for some investors. Expectations may have simply been too high for the fintech star. Square’s share price tripled last year, before its fourth quarter report, and many investors probably decided to take some profits off the table on Wednesday.
Square also revealed that it bought another $ 170 million in Bitcoin. Along with its $ 50 million investment in October, Bitcoin now represents about 5% of Square’s total cash reserves. It is possible that some investors are increasingly concerned about Square’s increased exposure to the volatile cryptocurrency.