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Yahoo Finance Selects Square As The Company Of The Year
Square was selected as Yahoo Financeâs Company of the year. There are many reasons behind this decision, but during the last year it is up around 70% and analysts predict a good future ahead.
Square is a company that was founded by Jack Dorse and Jim McKelvey ten years ago and that has been growing during all this time. Although the company was up 170% in October, it has registered a very important increase since the beginning of the current year.
Over the last year, the company launched three different and new hardware devices. The first one is known as âRegister,â an all-in-one point-of-sale (POS) system that targets large sellers. The second one is called Termina, a small brick that allows credit cards to be swiped, inserted or tapped without having to use an iPhone or iPad. Finally, it launched a new version of its Reader. This device can be plugged into a device and allow card swiping.
During the year it has also purchased different companies such as Zesty or Weebly. Zesty has been bought to enhance Caviar, an application specifically built for restaurant delivery. Cash App, a peer-to-peer wallet has also surpassed Venmo in the total number of downloads.
Back in January, the company was traded close to $36 and it reached almost $100 in October. Yahoo Finance wrote that they take into account different variables to define which is the company of the year. Among the things analysed Yahoo Finance explained:
âIn making this editorial decision each year, we take into account stock performance, sales growth, product innovation, and analyst sentiment. We also poll our readers on their pick; the top reader picks this year were Amazon, Apple and Tesla, with Square at No. 8.â
At the moment of writing, Square has a market capitalization of $26 billion and has over 2,300 employees. The last companies selected by Yahoo Finance were Facebook in 2015, Nvidia in 2016 and Amazon in 2017. Yahoo explains that Square is becoming a recognized company in the financial services industry.
Jack Dorsey, the CEO of Square, said that they were able to build all-in-one devices. For him, Square Register and Square Terminal are the main reasons why sellers chose Square as a company. With its services, the company is currently offering services to more than 2 million sellers, mostly in the United States. Every single time a credit card is swiped, the company charges 2.75%.
The company focuses on design and usability. The products are built in very high quality, and this can be seen in the number of merchants already using these solutions. Jesse Dorogusker, hardware lead at Square, says that they wanted to create a product that people to have a nice experience when they pay with their credit card. Indeed, Dorogusker worked before at Apple, which has high-quality products that focus on users.
Cash App is an application that was launched back in 2013 and that has been growing during the last few years. Square was able to compete against Venmo that had millions of users all over the United States. The application has received a lot of attention since it added support to bitcoin (BTC).
Indeed, Dan Dolev, an analyst at Nomura Instinet, explained that Cash App downloads surpassed Venmo downloads for the first time in July 2018. This was just some time after Square added support to BTC.
Back in November 2017, the company informed that it was testing Bitcoin solutions for its clients through the Cash App. After the announcement, Square stocks grew 16%. Brian Grassadonia, Cash App lead, says that the intention is to democratizing access to financial tools for customers.
Nevertheless, there are some analysts that suggest that Square took the decision to include Bitcoin support in order to gain attention in the market and receive support from the Bitcoin community. In economic terms, Square made just $420,000 in Bitcoin in the second quarter of the ear and $550,000 during the third quarter.
âThey hopped on the crypto bandwagon, got tons of press, and it significantly increase awareness of Cash App and drove a lot of downloads,â explained Josh Beck, an analyst at KeyBank Capital Markets analyst. âTo me, it was a brilliant customer acquisition strategy.â
Clearly, Bitcoin does not explain all the growth that this company had during the year. It neither explains by itself why Yahoo Finance took the decision to chose Square as the company of the year. However, Bitcoin played an important role in order to give square exposure to clients that did not know about the application or were just reluctant to use it without crypto-support.
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