[On :freetrade:] Square 🇬🇧 (SQ)

Jack Dorsey’s Square Inc. already lets customers buy and sell Bitcoin on its popular Cash App. Soon, it may let them buy and sell stocks.

Square is testing out a new Cash App feature that would enable users to make free stock trades, according to a video outlining the product’s features seen by Bloomberg. While the exact date of its launch is yet to be determined, employees began testing the new feature in recent weeks, according to a person familiar with the company …

https://www.bloomberg.com/news/articles/2019-09-12/jack-dorsey-s-square-is-testing-a-new-free-stock-trading-service

Square share price since the IPO with a market cap of around $25 billion currently:

Year to date:

Sold out of SQ today, think they’ve got some great tech though. Anyone holding long?

Cash App - the most popular e-wallet in the US?

Earnings coming up. This is Jack Dorsey’s other business. Money-wise, Twitter is just a hobby.

The Cash App is hot. Features: debitcard stuff, money transfers, stock trading, bitcoin, paycheck depositing.

Square’s Cash App now seems to be the most widely used digital wallet in the US. According to our research, the number of Cash App monthly active users (MAUs) has more than quadrupled in two years, from 7 million in late 2017 to 29 million at the end of 2019. In the last few weeks, it hit 30 million, according to our modeling. In contrast, increasing at a slower rate, the more established digital wallet in the US, PayPal’s Venmo, has lost its lead, surpassing 25 million MAUs at the end of 2019 according to our estimate derived from Venmo’s API, as shown below.


Repost from 💔 Winner Takes Most - Monzo, Revolut, Starling, Atom, Tandem, N26 🏦

Square - which offers stock trading - reported:

In the third quarter of 2019, total net revenue for Cash App was $307 million. Excluding bitcoin, Cash App revenue was $159 million, up 115% year over year.

That’s RH, Coinbase, and neobanks’ territoriy.

The reviews for its Android app are funny:

iOS reviews look better:

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… Looks like Square’s Cash App (with stock trading, e-wallet stuff, and bitcoin trading?) is coming to the UK. Just checked their site. Random discovery. It’s not even in the major news yet.

Investor Day: March 18, 2020.

4Q 2020 earnings: 26 February (today).

oprahh

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I think they are one to watch and invested in recently. In line with the market their stock crashed, so its a good one to keep an eye on and invest in once the market stabilises. I am definitely going to stick more in them.

In the early days of PayPal in the 90s - or in the early days of companies that formed PayPal after the merger (Elon Musk was with X.com, I think) - they went after users by handing money out agressively. Musk helped build one of the earliest fintechs.

65k…

Cash App’s user engagement on social is very non-corporate. They’re clearly not after the baby boomer generation, although who knows. Don’t know what most of the stuff they share online means but it’s cool and youngsters can relate to cool:

I don’t know what any of this means but it’s getting 7-8k likes:

image

Cash App has 1.1 million Instagram followers, although who knows how many are true users:

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NSFW - mentions of Cash App in search:

https://twitter.com/search?q=cash%20app

100 Thieves are an e-sports team. They must have sponsored them and bought them a team house.
I suppose that’s a good way to reach a younger, more tech savvy audience.

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Also shows that I am an old before my age as I had no idea what 100 Thieves meant.

/sonotdownwiththekids :joy:

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Q4 Shareholder Letter 2019

Cash app is up to 24 million monthly actives. That’s 60% growth over the year. Average customer buys $20 of fractional shares per purchase.

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Incredible revenue. Poor cash flow. Mega growth.

N26, Revolut and Monzo have to compete with Square’s Cash App in the US, while it’s planning to plant its flag i.e. the app in the UK.

Q4 2019 Cash App (not total Square) net revenue $361 mm (+147% yoy)… “Excluding bitcoin, Cash App revenue was $183 million, up 96% year over year.”

Total 2019 Cash App net revenue - $1.1 billion.

Total bitcoin revenue for 2019:

After hours: trading at around 82.75. That’s around 8%+ increase versus the closing price.

The price may fall again because of all the macro stuff. The algos are busy trading shares.

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Investing

We launched fractional equity investing in the fourth quarter to provide customers with an accessible way to invest in the stock market. Within the first three months since its launch, equity investing has seen the fastest adoption of any product ever launched by Cash App. Customers are taking advantage of the ability to buy fractional shares, with the average customer buying around $20 of stock every time they make a purchase. New products like investing have driven greater adoption and engagement across the broader Cash App ecosystem.

Revenue growth

In the fourth quarter of 2019, total net revenue for Cash App was $361 million, up 147% year over year, and gross profit was $144 million, up 104% year over year. Excluding bitcoin, Cash App revenue was $183 million, up 96% year over year. While Cash App’s number of monthly active customers has grown rapidly, revenue has increased even faster. In December, Cash App generated annualized revenue of more than $30 per monthly active customer, excluding bitcoin, which grew more than 25% compared to the prior year. Cash Card was an important driver of revenue growth, as we have grown the number of customers using the card and existing customers have been spending more with the card.

On the cash flow side, if it wasn’t for the sale of its stake in Caviar to Doordash, Square would’ve had to borrow from the market - free cash flow was just $95 mm. In 2018, they issued nearly $900m in convertible debt to help fund their operations.

Source:

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Square seems to be growing so fast thanks to the network effects that they are creating with their marketing ($cashtags, social etc) (it’s not a fact though).

And if they are keen to continue burning cash to grow their Cash App overseas, such as in the UK, they could effectively fund the exansion with only their bitcoin business.

Cash App’s $cashtags allow you to send money to Cash App users easily.

It’s your unique ID and you get a URL too: https://cash.app/$yourcashtag

As Cash App spends its money on marketing and virality, they can grow people’s networks. The law of networks of networks or the network effect can make people sign up to a service because their friends and relatives are on the same service. This is like the early days of college Facebook.

$cashtags were introduced in 2015:

Twitter’s stock ticker symbol tracking with $ - thanks, Stocktwits (the maker of TradeApp) - were introduced in 2012:

If people use their cashtags online, they can be used for data science and all kinds of analytics, just like the stock ticker usage:

https://firstmonday.org/ojs/index.php/fm/article/view/5385/4109

UK £ cashtags are coming:

Noticed they use the £ symbol for its UK page:

Growth over 6-7 years:

Square’s Cash App, which was initially launched in 2013, was the fastest-growing payments app in the U.S. last year, according to App Annie’s “State of Mobile 2020” report. The firm also named Cash the top “breakout” finance app in the U.S., beating the bank-backed Zelle and PayPal’s Venmo – which ranked second and third, respectively.

Square has gradually expanded Cash from a peer-to-peer payments app into a full-blown fintech ecosystem with bitcoin and commission-free stock trades. It’s also linked to a physical Cash Card, which can be used as a regular debit card.

Over the next five years, the expansion of Cash – along with Square’s other fintech services like Instant Deposit and its financing arm Square Capital – should lock in more consumers and merchants.

There are no Cash App jobs advertised in the UK.

Even Stake has one manager job on its careers page, which didn’t stop them from launching here (Robinhood should learn from the Aussies).

Square - which first started with card readers for handhelds - has this one - Hardware Product Marketing Manager:

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The stock is up a little versus previous close:

The FT app shows it’s down because it may be using the opening price for some reason.

+11%. The machines are busy.

Yeah, square is saving the day for me so far. :muscle:t2:

Did you take your profits like the rest of the algorithmic traders?

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Shooting up again today, seems like people are using it as a hedge against corona virus. Still want to invest more in them, but waiting to see what happens first when the market stabilises - feels like people are now just piling in…