Traders who invested in payment and digital wallet platform Square Inc. have been on a profitable ride as of late. So we explore the reasons why this particular stock is a buy right now.
This week Square announced the purchase of Afterpay, an Australian payment platform, and caused their stock to trade 10% higher on Monday. The impressive move has acquired notoriety for many reasons.
First of all, the announced $29 billion acquisition of Afterpay is the largest transaction seen in Australian history. As a leading ‘buy now pay later’ platform, Square considers the opportunity of exploiting many verticals between both companies.
Secondly, this move proves that the company will not remain set on its current status and look for bold ways to expand. The company shows it will keep being aggressive and inking acquisitions that will benefit long-term growth, which will attract traders looking for just that kind of company to invest in.
The company stated in their press release announcing the acquisition of Afterpay that this deal brings together two of the fastest-growing fintech companies in the world to advance the shared mission of economic empowerment and financial inclusion. This mission is crucial to Square, and the company reiterates this fact many times in its release. These companies hope that they can do more good together than alone. They plan to focus on building a “more fair, accessible and inclusive financial system.”
The fact that the 29B deal was an all-stock acquisition helped the stock keep its price levels. This means that Square is not going into debt but is emitting stocks as a result of the purchase instead. In addition, because of the way the acquisition was inked, investors shall not worry about the company going too far on spending.
Square expects to expand its business outside its core market in the US. However, Afterpay is a valuable asset as the Asia Pacific area is important to investors and makes a great expansion opportunity that many analysts believe may have competitors afraid.
There is no doubt that after the acquisition, the positioning of Square stock will remain solid for the foreseeable future, as it is becoming the world’s BNPL platform.
Is Square a new BNPL leader to follow? Let us know what you think in the comments below.
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