The head of Block Inc.'s merchant business is stepping down after a long tenure with the company, and Jack Dorsey will assume her role.
Block Inc.’s stock has been a sizable laggard this year, and now it’s losing the leader of a critical business — albeit one that hasn’t necessarily lived up to investor expectations lately.
The announcement comes as Block shares have declined 18% so far this year, while the S&P 500 SPX has risen 16%. Other payment-technology stocks, including Shift4 Payments Inc., FOUR, -0.54% Toast Inc. TOST, +1.34% and even PayPal Holdings Inc. PYPL, -1.98% have logged better year-to-date performances.
The performance of the Square merchant business, which includes payment processing and other tools for sellers, has been a sore point for investors recently. Wolfe Research analyst Darrin Peller notes that Block’s second-quarter U.S. gross payment volume was up 10% from a year earlier, a four-point spread above Visa Inc.’s V, +1.49% domestic growth. Historically, the spread has been in double digits, he said.
“While some of Square’s success over the years should be attributed to Alyssa’s execution, the company’s more recent performance remains a concern for investors ,” Peller wrote.“Bulls argue that this change is positive, indicating that management is taking change seriously,” Peller said. “Further, it’s worth noting that Jack has been more receptive to cost management and other adjustments.
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