Block’s stock falls toward longest losing streak in 20 months

Block’s stock has lost 17.2% over the current eight-session stretch. It was on pace for its lowest close since April 3, 2020. 

While technology shares broadly have seen some pressure since Block’s losing streak began, Block shares have sold off far more sharply. 

Investors haven’t given a positive reception to Block’s announcement earlier this week that Alyssa Henry, a company veteran who heads the Square merchant business, plans to step down. Jack Dorsey, who leads all of Block, will assume her duties in addition to his own.

Read: Block’s stock has been a laggard lately. Will management shakeup provide a needed jolt?

“While the company is not making an explicit connection between the two, presumably Henry’s departure is related to the recent sluggish performance of Square,” SVB MoffettNathanson analyst Lisa Ellis wrote in a note to clients.

She called Henry’s planned exit “a likely negative indicator for the health of the Square business,” adding that “it is difficult to interpret it otherwise.”

Ellis will be monitoring Dorsey’s approach to the business, specifically whether the company improves its distribution model for larger merchants and its omnichannel tools that include online ordering. She’ll also be watching to see if Square can continue to accelerate its international growth “where the markets are more fragmented, but often less competitive,” she said.

Mizuho’s Dan Dolev was more upbeat, writing that Dorsey “has a rare zest of brilliance in building viral networks.”

He added: “Renewed focus on the [point of sale] business — and less time on Bitcoin — can be a big long-term positive.”

Dolev had downgraded Block’s stock a year ago, expressing concern that the company was “disproportionately” focused on its bitcoin efforts.

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