Tag Archives: Square Inc

Business

Square changes corporate name to Block

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Jack Dorsey (L), CEO of Square and CEO of Twitter, live casts video while standing outside the New York Stock Exchange for the IPO of Square, in New York November 19, 2015.

Lucas Jackson | Reuters

Square is renaming itself Block as it focuses on technologies like blockchain and expands beyond its original credit card reader business.

Jack Dorsey’s payments giant said in an announcement the new name, effective Dec. 10, “acknowledges the company’s growth” and “creates room for further growth.” Block will still trade under the ticker SQ on the New York Stock Exchange.

“We built the Square brand for our Seller business, which is where it belongs,” Jack Dorsey, cofounder and CEO of Block, said in a statement. “Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.”

Dorsey co-founded Square in 2009 with a focus on in-person payments and its namesake card reader, which let people accept credit card payments on a smartphone. San Francisco-based Square has since added a peer-to-peer digital banking app, small business lending, received a bank charter and offers crypto and stock trading. The company has acquired buy-now-pay-later provider Afterpay and Jay-Z’s music streaming service Tidal. It’s also doubling down on bitcoin with a crypto-focused business called TBD.

As part of the Square rebrand, a separate part of the company “dedicated to advancing Bitcoin,” known as Square Crypto, will change its name to Spiral.

“The name has many associated meanings for the company — building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music, a blockchain, a section of code, and obstacles to overcome,” Block said in a statement.

Dorsey stepped down from his other job as Twitter CEO on Monday after running both Twitter and Square since 2015. Dorsey cited a belief Twitter was “ready to move on from its founders,” and will now have more time to dedicate to Square’s growing portfolio. But Dorsey is also expected to focus on his fascination with cryptocurrency.

The news comes roughly a month after Facebook changed its name to Meta to reflect on CEO Mark Zuckerberg’s plan to build a virtual world called the metaverse. Google famously renamed itself Alphabet six years ago in a similar move to reflect other lines of business.

Square was one of the biggest winners of 2020 as consumers shifted to digital payments. Shares are down roughly 2% so far this year, as investors rotate away from higher-growth tech names.

Correction: Square (now Block) trades on the NYSE.

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Business

What Jim Cramer is watching in the market Tuesday, including why the selling has returned

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Jim Cramer on CNBC’s Halftime Report.

Scott Mlyn | CNBC

(This article was sent first to members of the CNBC Investing Club with Jim Cramer. To get the real-time updates in your inbox, subscribe here.)

What I am looking at November 30, 2021:

  • Second thoughts about omicron related to downbeat talk by Moderna’s Noubar Afeyan co-founder of Moderna (MRNA) who says the strain poses serious threats and Bancel’s interview with the FT was much more downbeat then when he was on CNBC… told FT “material drop” in effectiveness… But still using several months time frame to solve things… lots of money on the line for Moderna… I have Dr. Topol on Mad Money tonight who has been the most right of the commentators save Gottlieb…
  • Square (SQ)… sell to hold at Bank of America, but still need visibility on cash app… Dorsey all in – will we get a mid-quarter update tomorrow?… focus turns to Afterpay…. Fits into Seller and Cash App systems…
  • Piper says Edwards Lifesciences (EW) is the best beat and raise story… I think it is better than Medtronic, which missed badly…
  • When will the activists come for 3M (MMM) which has so badly underperformed?
  • Ford (F)  will pass GM in number of EV sold according to Morgan Stanley’s Jonas in 2021… calculates Mustang Mach-E selling 2,800 cars per month profitably,  150,000 next year-3.5% of volume…. I am convinced that is low
  • Factory output in China up for first time in a while according to November numbers… coincides with improving Baltic freight… should spur another Caterpillar (CAT) run… tiresome
  • Oil bear market?… Club members get ready to buy some Chevron (CVX) which makes a ton of money above $70…
  • Marvell Technology (MRVL)…BMO goes $70 to $80 on price target—remember high perf computing an 5G… Club name, reports this week… tends to sell off on the news…
  • Walmart (WMT)…Guggenheim says don’t panic on loss of CFO Brett  Biggs… 1.5% dividend… 22 times 2022 earnings estimate… deserves premium…
  • Dollar Tree (DLTR) downgrade to neutral at Goldman Sachs… cites slowing low end consumer, declining traffic…expected improvements now priced in.   Further growth limited?
  • Solaredge (SEDG) downgraded by Morgan Stanley… up 17% in 3 months percent… more balanced risk reward so buy to hold.
  • JPMorgan analyst Tusa trashes General Electric (GE) again… says plan is far from original… no change, net leverage -despite better pension performance… neutral rating but he is relentless
  • 10-year at 1.69% last week, now at 1.42%… Is the world stopping?
  • Wedbush cuts Twitter (TWTR) price target from $69 to $52… lower multiples…internal candidate as CEO not a surprise

The CNBC Investing Club is now the official home to my Charitable Trust. It’s the place where you can see every move we make for the portfolio and get my market insight before anyone else. The Charitable Trust and my writings are no longer affiliated with Action Alerts Plus in any way.

As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Typically, Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If the trade alert is sent pre-market, Jim waits 5 minutes after the market opens before executing the trade. If the trade alert is issued with less than 45 minutes in the trading day, Jim executes the trade 5 minutes before the market closes. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. See here for the investing disclaimer.

 (Jim Cramer’s Charitable Trust is long F, MRVL.)

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Business

Pfizer, Canada Goose, Live Nation and more

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Check out the companies making headlines before the bell:

Pfizer (PFE) – The drug maker’s shares surged 9.4% in premarket trading after a study showed that its experimental Covid-19 antiviral pill reduced the risk of hospitalization and death by nearly 90%. Pfizer said it will ask regulators to approve the pill as soon as possible.

Canada Goose (GOOS) – The outerwear maker reported an unexpected profit for its latest quarter along with better-than-expected revenue, and also raised its full-year forecast. Canada Goose also said it’s seeing an indication of a strong winter season, and shares jumped 4.6% in the premarket.

Live Nation Entertainment (LYV) – Live Nation shares rallied 5.4% in premarket action after the event promoter returned to profit amid a sales surge as live events returned. Results exceeded analyst estimates.

DraftKings (DKNG) – The sports betting company’s stock slid 3.5% in the premarket after it reported a wider-than-expected loss and revenue that fell short of Street forecasts. DraftKings did raise the midpoint of its fiscal 2021 revenue guidance and said it expected a strong 2022.

Canopy Growth (CGC) – The Canadian cannabis producer lost 3 cents per share for its latest quarter, smaller than the 20-cent loss expected by analysts. However, revenue fell short of estimates and the company flagged slower-than-expected revenue growth for the second half of fiscal 2022. The stock fell 3.5% in the premarket.

Peloton (PTON) – Peloton tumbled 31.8% in the premarket after the fitness equipment maker slashed its full-year sales forecast by $1 billion, amid slowing demand for bikes and treadmills. Peloton also reported a quarterly loss of $1.21 per share, wider than the $1.07 loss expected by analysts, and revenue fell short of estimates as well.

Expedia (EXPE) – Expedia earned an adjusted $3.53 per share for its latest quarter, well above the $1.65 consensus estimate. Revenue was also higher than expected, with the travel services company benefiting from the surge in travel demand. Expedia soared 13.2% in premarket trading.

Airbnb (ABNB) – Airbnb rallied 6.2% in the premarket as the travel-demand surge lifted sales and earnings beyond Wall Street forecasts. Airbnb earned $1.22 per share for its latest quarter, beating the $0.75 consensus estimate, with sales coming in at a record high. The company also said it expects a strong holiday season.

Uber Technologies (UBER) – Uber reported its first profitable quarter on an adjusted basis, thanks to upbeat performances by its ride-sharing and food delivery services. It did post an overall loss due to the drop in value of its stake in China ride-hailing company Didi (DIDI). Uber rose 1.2% in premarket trading.

Pinterest (PINS) – Pinterest came in 5 cents above estimates with an adjusted quarterly profit of 28 cents per share, and the image-sharing site operator’s revenue also topped analyst forecasts. It is also predicting an upbeat current quarter as the online retailer spends more on holiday season ads. Pinterest jumped 4.5% in premarket action.

Shake Shack (SHAK) – Shake Shack reported a quarterly loss of 5 cents per share, 1 cent less than Wall Street had anticipated, but the restaurant chain’s sales missed analyst forecasts. Despite the revenue miss, Shake Shack rallied 6.3% in the premarket.

Square (SQ) -Square matched estimates with quarterly earnings of 37 cents per share, while the mobile payments company’s revenue missed forecasts. Square did see a nearly 60% rise in profit from a year earlier, thanks in large part to a surge in bitcoin transactions, but the stock dropped 3.7% in premarket trading.

Lions Gate Entertainment (LGF) – The movie and tv studio is considering a sale or spin-off of its Starz premium cable channel, saying it sees the potential to unlock significant shareholder value. The stock surged 15.1% in the premarket.

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Business

Semiconductor shortage to be in focus yet again

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CNBC’s Jim Cramer on Friday looked ahead to next week’s of earnings reports, detailing for investors his key market events to keep an eye on.

The “Mad Money” host’s comments came after all three major U.S. equity indexes closed at record highs Friday, despite disappointing quarterly results a day earlier from market heavyweights Amazon and Apple.

All revenue and per-share earnings projections are based on FactSet estimates:

Mad Money with Jim Cramer

Monday: ON Semiconductor, NXP Semiconductors, Diamondback Energy and Clorox

On Semiconductor

  • Q3 results before the bell; conference call at 9 a.m. ET Monday
  • Projected EPS: 74 cents
  • Projected sales: $1.7 billion

NXP Semiconductors

  • Q3 results; conference call at 8 a.m. ET Tuesday
  • Projected EPS: $2.75
  • Projected sales: $ 2.85 billion

Both companies’ earnings will offer “a read on one of the biggest stories in this market, and that’s the semiconductor shortage,” Cramer said. “They do a lot of auto semis, and they’ve got exposure to many of the others areas where there are the biggest bottlenecks.”

Diamondback Energy

  • Q3 results after the close; conference call at 9 a.m. ET Tuesday
  • Projected EPS: $2.79
  • Projected revenue: $1.54 billion

Clorox

  • Q1 2022 results after the bell; conference call at 5:30 p.m. ET Monday
  • Projected EPS: $1.03
  • Projected revenue: $1.7 billion

“I hope for the best, but I am preparing for the worst,” Cramer said, noting the household products maker may not be able to pass through all of its higher commodity costs, possibly hurting margins.

Tuesday: Estee Lauder, DuPont, Pfizer, BP, Devon Energy, T-Mobile and Zillow

Estee Lauder

  • Q1 2022 results before the open; conference call at 9:30 a.m. ET Tuesday
  • Projected EPS: $1.70
  • Projected sales: $4.25 billion

DuPont

  • Q3 results before the bell; conference call at 8 a.m. ET Tuesday
  • Projected EPS: $1.12
  • Projected sales: $4.16 billion

Cramer’s charitable trust owns both Estee Lauder and DuPont. “I don’t expect them to have superb quarters. Fortunately, the expectations are low, though, so it won’t take much to produce an upside surprise that moves the stocks up,” he said.

Pfizer

  • Q3 results before the open; conference call at 10 a.m. ET
  • Projected EPS: $1.08
  • Projected revenue: $22.58 billion

“Unlike Moderna, Pfizer’s a lot more complicated than just a Covid vaccine story. See, they’re facing what’s known as a patent cliff next year,” Cramer said. “We need to know if the boosters, which cost a lot of money, … are going to cover the patent cliff.”

BP

  • Q3 results before the bell; conference call at 5 a.m. ET Tuesday
  • Projected EPS: £ 10.83
  • Projected revenue: £29.06 billion

Devon Energy

  • Q3 results after the close; conference call at 11 a.m. ET Wednesday
  • Projected EPS: 93 cents
  • Projected sales: $3.23 billion

T-Mobile

  • Q3 results after the close; conference call at 4:30 p.m. ET Tuesday
  • Projected EPS: 48 cents
  • Projected revenue: $20.22 billion

“The [telecommunications] industry has got a clear pecking order: T-Mobile for growth, Verizon for the dividend, and AT&T for nothing. Let’s see how many subscribers T-Mobile has been able to steal from its rivals when they report,” Cramer sad.

Zillow

  • Q3 after the close; conference call at 5 a.m. ET Tuesday
  • Projected EPS: 16 cents
  • Projected revenue: $2 billion

“They had to put the real estate flipping business on pause because the economics turned out against them, but what does that really mean? We’re going to find out on Tuesday,” Cramer said.

Wednesday: CVS Health, Humana, Marriott International, Wynn Resorts, Qualcomm and Etsy

CVS Health

  • Q3 results before the bell; conference call at 8 a.m. ET Wednesday
  • Projected EPS: $1.79
  • Projected revenue: $70.5 billion

“This stock’s been on a roll, bolstered by Covid vaccines and superior execution, at least compared to arch-rival Walgreens. I don’t know if it can continue now that the pandemic’s winding down, but remember that CVS also has a huge health insurance business,” Cramer said.

Humana

  • Q3 results before the open; conference call at 9 a.m. ET Wednesday
  • Projected EPS: $4.66
  • Projected revenue: $20.9 billion

Cramer said he expects the health insurer’s numbers to be even better than rivals Centene and UnitedHealth Group.

Marriott International

  • Q3 results before the bell; conference call at 8:30 a.m. ET Wednesday
  • Projected EPS: 99 cents
  • Projected sales: $3.71 billion

Wynn Resorts

  • Q3 results after the close
  • Projected EPS: Loss of $1.36
  • Projected revenue: $943 million

Cramer said he expects Marriott International to have a better story to tell about the hospitality recovery compared to Wynn Resorts, which his charitable trust owns. He said that’s because of Wynn Resorts’ exposure to the gaming hub of Macau.

Qualcomm

  • Q4 results after the close; conference call at 4:45 p.m. ET Wednesday
  • Projected EPS: $2.26
  • Projected revenue: $8.85 billion

“They’ll give us more insight into the cellphone market, but I bet that can’t be that positive, either,” Cramer said, alluding to the chip crunch.

Etsy

  • Q3 results after the close; conference call at 5 p.m. ET Wednesday
  • Projected EPS: 55 cents
  • Projected revenue: $519 million

“I bet CEO Josh Silverman will have a lot of good to say about his e-commerce platform for handicrafts—should make a nice contrast to Amazon’s disappointing quarter,” Cramer said.

Thursday: Uber, Skyworks Solutions, Peloton and Square

Uber

  • Q3 results after the close; conference call 5 p.m. ET Thursday
  • Projected EPS: Loss of 34 cents
  • Projected revenue: $4.41 billion

“I think Uber can deliver, but the stock’s been kept down by persistent sellers, so even a good quarter might not matter, at least not until these weak hands finish dumping their shares,” Cramer said.

Skyworks Solutions

  • Q4 results after the bell; conference call at 4:30 p.m. ET Thursday
  • Projected EPS: $2.55
  • Projected sales: $1.3 billion

“Maybe they give us some insight into when the chip shortage nightmare can come to an end,” Cramer said.

Peloton

  • Q1 2022 results after the close; conference call at 5 p.m. ET Thursday
  • Projected EPS: Loss of $1.10
  • Projected sales: $809 million

The fitness equipment maker was a major pandemic winner, but the stock has struggled to gain traction since investors shifted toward reopening plays, Cramer said. “I think they’ve got their work cut out for them.”

Square

  • Q3 results after the close; conference call at 5 p.m. ET Thursday
  • Projected EPS: 37 cents
  • Projected revenue: $4.38 billion

“I’m betting their mojo will be absent for now, mojo being a technical term on Wall Street for the massive love a stock gets after a monster beat and raise quarter,” Cramer said.

Friday: Enbridge and October nonfarm payrolls

Enbridge

  • Q3 results before the bell; conference call at 9 a.m. ET Friday
  • Projected EPS: 57 cents
  • Projected revenue: $9.62 billion

Cramer said he likes the company’s dividend payment. “Plus, we have a real shortage of energy infrastructure, so I bet business is good,” Cramer said.

The Labor Department’s report on nonfarm payrolls for the month of October is out at 8:30 a.m. Friday, but Cramer cautioned the recent monthly reports have been “all over the map right now,” making their appearance “seem deceiving.”

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Business

Square CEO Jack Dorsey says looking to build bitcoin mining system

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Square CEO Jack Dorsey said late on Friday the company might jump into the bitcoin mining business.

Dorsey tweeted that the company is considering a “bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.” The price of bitcoin rose above $62,000 following Dorsey’s string of tweets, as the world’s most popular cryptocurrency pushes toward its all-time high.

Dorsey’s goal would be to make crypto mining — the process of creating new bitcoins by solving increasingly complex computational problems — more accessible, much as Square’s original vision was to make it easier for small businesses and independent proprietors to take credit card payments. He wrote that bitcoin mining should be “as easy as plugging a rig into a power source.” Today, the bitcoin mining industry is dominated by large-scale players who can afford to buy tens of thousands of ASICs, the type of specialty gear used to mint new coin.

The team run by Jesse Dorogusker, who is the hardware lead at Square, will begin studying the technolody necessary to take this project on, according to Dorsey.

“We will incubate the bitcoin mining system project inside Square’s hardware team, starting with architecture, design, and prototyping of more efficient silicon, hashing algorithms, and power architectures,” Dorogusker wrote in a tweet.

Dorogusker said that Afshin Rezayee, the leader and architect of Square’s silicon team in Toronto since 2015, will lead the project, given silicon is at the core of this new initiative.

“Building a strong core in silicon is just a start. Delivering the value we imagine requires the full stack – silicon, hardware, software, manufacturing, and innovative distribution that can help us support the whole world,” continued Dorogusker.

Dorogusker is also leading Square’s project to build a crypto wallet.

Bitcoin mining should be easy, says Dorsey

Dorsey, who is also the CEO of Twitter, also outlined his thinking on why Square is looking to enter an already crowded field.

“Mining needs to be more distributed,” Dorsey wrote in a tweet. “The more decentralized this is, the more resilient the bitcoin network becomes.”

Dorsey shared in August that he personally was getting into minting bitcoin himself, with the help of bitcoin mining service provider Compass. In his tweets late Friday, the Square CEO advocated for this kind of egalitarian access to the mining world.

“Mining isn’t accessible to everyone,” wrote Dorsey. “Bitcoin mining should be as easy as plugging a rig into a power source. There isn’t enough incentive today for individuals to overcome the complexity of running a miner for themselves.”

The Square CEO went on to share his thoughts on the need for more of a focus on vertical integration, as well as on silicon design, which he says is too concentrated among a few companies.

The Square boss also jumped into the energy debate surrounding bitcoin’s carbon footprint.

“Driving towards clean and efficient energy use is great for bitcoin’s economics, impact, and scalability. Energy is a system-level problem that requires innovation in silicon, software, and integration. What are the largest opportunities here?” continued Dorsey.

The announcement from Square comes as the U.S. eclipses China for the first time ever as the world’s top destination for bitcoin miners. The U.S. is also flush with renewable power sources.

Washington state is a mecca for hydropowered mining farms. New York produces more hydroelectric power than any other state east of the Rocky Mountains, and it counts its nuclear power plants toward its 100% carbon-free electricity goal. Meanwhile, Texas’ share of renewables is growing over time, with 20% of its power coming from wind as of 2019. The Texas grid also continues to rapidly add more wind and solar power.

Texas also has a deregulated power grid with real-time spot pricing that lets customers choose between power providers, and crucially, its political leaders are pro-crypto. Those are dream conditions for miners who want a kind welcome and cheap energy sources.

“If you’re looking to relocate hundreds of millions of dollars of miners out of China, you want to make sure you have geographic, political, and jurisdictional stability. You also want to make sure there are private property rights protections for the assets that you are relocating,” said Darin Feinstein, co-founder of Core Scientific. 



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Business

Cramer says PayPal and SoFi are buys. Here’s how he would play other fintech leaders

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Some of the nation’s largest traditional banks are reporting earnings this week, prompting CNBC’s Jim Cramer on Wednesday to review the investment case for the tech-driven companies that are seeking to disrupt legacy players in finance.

The “Mad Money” host dubbed the following six companies “nouveau banks”: PayPal, Square, Upstart, Affirm, Robinhood Markets and SoFi Technologies.

“It’s a good time to get some … nouveau bank exposure,” Cramer said, because expectations for Wall Street banks are high coming into earnings season. That means their stocks could get hit if results don’t smash expectations, he said, like JPMorgan Chase on Wednesday.

“If the rest of them go like JPMorgan … then it’s possible we could have still one more exodus from the straight financials and one more love affair with the fintechs,” Cramer said.

Here’s how Cramer would play the landscape:

Buy it now

The PayPal app shown on an iPhone.

Katja Knupper | DeFodi Images | Getty Images

Cramer said PayPal and SoFi are worth buying right here.

PayPal has done a great job expanding its products to include new offerings such as adding a buy now, pay later platform, Cramer said, as well as offering cryptocurrency trading and high-yield savings accounts through a Synchrony Bank partnership.

“While the stock remains expensive here, I think it’s worth buying now that it’s down 17% from its highs, which is why we added some for the charitable trust last week.”

SoFi, led by CEO Anthony Noto, also has a range of services that now includes selling insurance policies, brokerage accounts and mobile cash management, Cramer said. “SoFi is well on its way to obtaining a banking charter, too,” he added.

However, SoFi’s stock has struggled to gain traction since the company completed a reverse merger to start trading on the Nasdaq in June. Even as SoFi benefited from Morgan Stanley analysts rating its stock a buy, “it’s still down nearly $10 from its highs earlier this year,” Cramer said.

The other guys

Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a screen during his company’s IPO at the Nasdaq Market site in Times Square in New York City, U.S., July 29, 2021.

Brendan McDermid | Reuters

Cramer said he finds Square “enticing” now that the company — which offers peer-to-peer payments, small business loans and equity and crypto trading — has seen its stock fall about 16% from its August highs.

However, he said, “I like PayPal more than Square because it’s cheaper.”

Upstart, a loan originator that uses artificial intelligence to facilitate the process, should be on investors’ shopping lists, Cramer said. But with the stock up 746% year to date, “wait for a pullback and then you pull the trigger,” he said.

Similarly, Cramer said he believes investors should wait for a bit of decline in shares of Affirm , a leader in the increasingly popular buy now, pay later space that’s scored high-profile deals with Amazon, Walmart and Target.

Robinhood, a pioneer in zero-commission trading, has big ambitions to become a “single money app” for consumers, Cramer said. Even so, Cramer said it’ll take time to get there, plus the top U.S. securities regulator is looking into its core business model of payment for order flow.

“While Robinhood is not my favorite, it’s way too important to ignore,” Cramer said.

Disclosure: Cramer’s charitable trust owns shares of Amazon, Morgan Stanley and PayPal.

Sign up here for the new CNBC Investing Club newsletter to follow Jim Cramer’s every move in the market, delivered directly in your inbox.

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Business

American Airlines, Nucor, Goldman Sachs and more

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Bundles of steel from Nucor Corp. sit for sale to at Thompson Building Materials in Lomita, California, U.S., on Thursday, Aug. 30, 2012.

Patrick Fallon | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.

American Airlines, United Airlines, Delta Air Lines — Shares of American Airlines the major airlines rose over 1% Monday after the White House said it would ease travel restrictions for international travelers who are vaccinated against Covid-19. Shares of Delta and United gained earlier but ticked down nearly 0.2% each.

China Evergrande Group — Shares of the embattled Chinese property giant dropped 10% on the Hong Kong Stock Exchange. The company has been scrambling to pay its suppliers, and warned investors that it could default on its debts. Last week, the company said its property sales will likely continue to drop significantly in September several months of weakness.

Centerpoint Energy, Dominion Energy — Utility stocks rose on Monday as investors shifted toward defensive plays during the broader market slide. Shares of Centerpoint and Dominion rose roughly 1% each.

Nucor, Freeport-McMoRan, Ford, Caterpillar — Stocks linked to global growth declined Monday. Steel stock Nucor declined 8.4%, miner Freeport-McMoRan fell 6.6%, auto maker Ford dropped 6% and construction equipment manufacturer Caterpillar retreated 4.8%.

APA, Devon Energy — Energy stocks tumbled amid a drop in oil pries on concerns about the global economy. The S&P 500 energy sector fell 3.3%, becoming the worst-performing group among the 11 groups during Monday’s market sell-off. APA and Devon Energy both shed more than 6%. Occidental Petroleum dropped 6% and Hess slid over 5%.

Goldman Sachs, Bank of America, JPMorgan Chase — Financials stocks declined as the U.S. 10-year Treasury yield dropped, with falling rates typically crimping bank profits. Goldman Sachs, Bank of America and Citigroup all shed more than 4%. JPMorgan Chase and Morgan Stanley both declined more than 3%.

ARK Innovation, Coinbase, Tesla, Zoom, Square — Shares of Cathie Wood’s flagship fund dropped more than 4% as innovation names experienced harsh selling. Top holdings Coinbase and Teladoc both lost more than 5%. Unity Software shed over 5%, and Tesla dropped more than 3%. Square and Zoom Video dropped more than 3% each.

Pfizer — The drug maker stock ticked 0.3% higher after the company said its Covid vaccine is safe and appears to generate a robust immune response in kids ages 5 to 11. If the FDA spends as much time reviewing the data for that age group as it did for 12- to 15-year-olds, the shots could be available in time for Halloween.

AstraZeneca — Shares of the United Kingdom-based pharmaceutical company popped more than 4% in midday trading after announcing that its breast cancer drug Enhertu showed positive results in a phase-three trial.

Invesco — Invesco shares declined 9% Monday. The stock ran up on Friday following a Wall Street Journal report that the asset manager is in talks to merge with State Street’s asset management unit. The report, citing people familiar with the matter, said a deal is not imminent and might not happen at all.

— CNBC’s Maggie Fitzgerald, Yun Li and Jesse Pound contributed reporting

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Business

Why millennials and gen-Zs are jumping on the buy now, pay later trend

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All 21-year-old Taylor Emmi wanted was a cosmetic kit from makeup artist and social media star Jeffree Star after watching a video about the brand on YouTube in October 2019.

So she took the $144 leap, and nearly two years later, she’s shelled out thousands on a makeup brand she normally couldn’t afford thanks to a buy now pay later platform known as Afterpay.

“Obviously I really like the things and want to collect them, but I would have never been able to have half of it without Afterpay,” Emmi said.

Buy now pay later platforms that allow customers to purchase on installment plans are growing in the U.S., and younger Americans seeking new ways to purchase high ticket items like computers and designer clothing with lower wages are obsessed.

While the platforms have existed in the U.S. for years, demand and investor interest in the companies are starting to pick up. Just this week, digital payments company Square said it would purchase Afterpay in a $29 billion all-stock deal. As of June 30, Afterpay served more than 16 million customers and roughly 100,000 merchants.

Apple is also reportedly teaming up with Affirm Holdings Inc.’s PayBright to launch an installment program for Apple devices bought in Canada, according to Bloomberg. And shares of Affirm, which went public in January, are up about 23% in the last three months as of Friday. Klarna is valued at almost $46 billion and raised $639 million in a funding round led by SoftBank.

And a lot of that interest is coming from the younger generations, millennials and Gen-Zs, who are turning to the various BNPL platforms instead of traditional credit cards with high interest rates.

CNBC interviewed seven Millennial and Gen-Z buy now pay later users for this story. The majority said they were drawn to the platforms for their convenience. At least six were influenced by peers or social media to start using the platforms and the majority started within the last year.

How buy now pay later works

Platforms like Afterpay allow users to make big box purchases like a new MacBook without having to shell out the entire cost upfront. They typically let users pay in four installments over a six-week period. Most also offer a companion app or web browser plug-in to equip payment with the merchant’s website.

User accounts are typically linked to a debit card or bank account, where payments are taken out automatically. They also offer automated reminders when an automatic payment is coming up. As a user makes more on-time purchases with the platform, their spending limit grows. For Emmi, that limit is $2,000 on Afterpay and $1,000 on Klarna.

Many platforms don’t charge interest to the customer, making money mostly off of retailer fees and some late fee charges. Affirm does charge interest. The platforms grew 215% year-over-year within the first two months of 2021, an Adobe analysis suggests. Studies have shown that when consumers pay in installments, they typically spend more.

‘It sounds cheaper’

Many younger consumers say they use buy now pay later because they want new clothing or electronics and don’t have the money, said Joseph Flowers, a full-time content creator. The 22-year-old regularly updates his wardrobe for his social media videos and uses Afterpay when a bill tops $300.

“This generation likes to buy a lot of things,” said Flowers, who started using Afterpay when he was approached for an advertising campaign. “I spend a lot of money, and it makes me feel better when I don’t have to pay it all at once.”

Breaking up costs because it “feels smaller” is not uncommon among younger generations, who struggle to think about or plan for the future, said Sarah Newcomb, a behavioral economist at financial services firm Morningstar. In the U.S., consumers focus on material goods rather than saving, a problem that social media is amplifying, she added.

Chiziterem Ogbonna admits there is a culture on TikTok and social media where people overspend and that is contributing to the growth of buy now pay later among her generation. Many platforms are utilizing TikTok for paid advertising campaigns with influencers, a platform some cash-strapped Millennials and Gen-Zs are also utilizing to crack jokes at the trend.

Eighteen-year-old Ogbonna typically uses Klarna for clothing company Shein purchases over $100 because four payments of $25 “sounds cheaper even though it’s not,” she said. At least four of those interviewed echoed that sentiment.

Some experts say in the wake of the financial crisis, younger generations are steering clear of traditional credit and debit. Emmi, the 21-year-old who works as a bartender and waitress, has two credit cards she rarely uses. She likes not worrying about overusing her credit limit with Klarna or Afterpay because “they don’t know that you owe anything.”

Many younger Americans say they use buy now pay later sparingly. Of those interviewed, at least four said a purchase needs to top $100. Emmi uses Afterpay or Klarma on any purchase she can but cautions overspending, a lesson she learned when she lost her job during Covid-19 and struggled to pay mounting installment bills.

“You want nice things and think ‘I’ll be able to pay for it over time,'” Emmi said. “But a lot of time you do have to scrape to [make a payment].”

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Business

Square, Moderna, First Solar and more

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Take a look at some of the biggest movers in the premarket:

Square (SQ) – The digital payments company agreed to buy Australia’s Afterpay for about $29 billion in stock, representing a roughly 30% premium for Afterpay shareholders. Square shares fell 4.8% in the premarket, but news of the deal boosted shares of U.S.-based payment company Affirm (AFRM) by 8.2%.

Zoom Video (ZM) – The video conferencing company agreed to pay $85 million to settle a lawsuit accusing it violated the privacy rights of users. It also agreed to beef up its security practices to prevent so-called “Zoombombing,” where hackers disrupted Zoom meetings.

General Electric (GE) – GE has completed its previously announced one-for-eight reverse stock split and will begin trading on a post-split basis today.

Moderna (MRNA), Pfizer (PFE), BioNTech (BNTX) – Moderna and Pfizer both raised prices for their Covid-19 vaccines in their latest supply contracts, according to the Financial Times. Additionally, The Wall Street Journal reported that the Food and Drug Administration is under pressure to give both vaccines full approval and that this could happen within the next month for Pfizer and partner BioNTech. Moderna rose 2.5% in the premarket, Pfizer gained 1%, while BioNTech surged 5.1%.

Foot Locker (FL) – The athletic footwear and apparel retailer announced a deal to buy California-based shoe store chain WSS for $750 million and Japan-based streetwear brand Atmos for $360 million.

Uber Technologies (UBER) – Shares of Uber gained 1.1% in premarket trading after Gordon Haskett Research Advisors initiated coverage with a “buy” rating. Haskett called Uber a company that is continually engraining itself in the everyday lives of consumers through its ride-hailing and food delivery services.

Capri Holdings (CPRI) – Capri rose 1.2% in the premarket following an upgrade to “buy” from “neutral” at MKM Partners, which noted a string of better than expected quarters for the company behind brands like Michael Kors and Versace. MKM also cited an overall improvement in the luxury goods sector.

Discovery (DISCA) – Discovery is in informal talks about a potential bid for British state-owned broadcaster Channel 4, according to Britain’s Telegraph newspaper.

Robinhood (HOOD) – More than 300,000 users of the stock trading app bought shares in Robinhood’s initial public offering last week, according to The Wall Street Journal. That represents about 1.3% of the company’s funded account base. Robinhood added 1.5% in premarket trading.

Parker-Hannifin (PH) – The maker of motion control technology and other industrial products is buying British rival Meggitt for about $8.8 billion in cash. Parker-Hannifin shares fell 2.2% in premarket action.

Li Auto (LI) – The China-based electric vehicle maker delivered 8,589 vehicles in July, an increase of 125% compared to July 2020. Li’s U.S.-based shares surged 4.3% in the premarket.

First Solar (FSLR) – The solar power systems maker’s shares gained 2.9% in premarket trading after Susquehanna Financial upgraded the stock to “positive” from “neutral,” based on upbeat management comments on solar module demand and pricing.

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Business

Square to buy Australia fintech Afterpay amid ‘buy now, pay later’ trend

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Jack Dorsey, CEO of Twitter and co-founder & CEO of Square, speaks during the crypto-currency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida, on June 4, 2021.

Marco Bello | AFP | Getty Images

Square plans to buy Australian fintech company Afterpay as it looks to expand further into the booming installment loan market.

Jack Dorsey’s payments company announced the $29 billion, all-stock deal on Sunday evening. The price tag marks a roughly 30% premium to Afterpay’s last closing price.

“Square and Afterpay have a shared purpose,” said Square’s CEO Dorsey in a statement. “We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles.”

Shares of Afterpay in Australia soared more than 23% Monday morning on the back of the news.

Square pointed to consumers eschewing traditional credit, especially younger buyers. The San Francisco-based payments company already offers installment loans, which said it has been a “powerful growth tool” for Square’s core seller business. It plans to integrate Afterpay into both its seller and Cash App ecosystems.

Afterpay lets customers pay in four interest-free installments and pay a fee if they miss an automated payment. Its 16 million customers will eventually be able to manage installment payments directly through Cash App. The deal is expected to close in the first quarter of 2022.

So-called installment loans have been around for decades, and were historically used for big-ticket purchases such as furniture. Online payment players and fintechs have been competing to launch their own version of “pay later” products for online items in the low hundreds of dollars.

Affirm is one of the better-known public companies offering the option to finance items in smaller, monthly payments. PayPal, Klarna, Mastercard and Fiserv, American Express, Citi and J.P. Morgan Chase are all offering similar loan products. Apple is planning to launch installment lending in a partnership with Goldman Sachs, Bloomberg reported last month.

Square also announced its second-quarter results on Sunday, ahead of the previously planned release on Wednesday.

Gross profit increased 91% from a year ago, which marked a record quarterly growth rate for the payments company. Cash App profit was up 94%, while seller jumped 85% from a year ago. Net revenue excluding bitcoin came in at $1.96 billion for the quarter, an 87% rise year over year.

The company’s Venmo competitor, Cash App now has 40 million monthly transacting active customers.

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