Shares of Jack Dorsey-led Block Inc, a digital payments firm that has bet big on bitcoin, declined nearly 7 per cent in premarket trading on Friday after the company reported a loss in quarterly results on waning interest in cryptocurrencies, reports Reuters.
The San Francisco, California-based company saw nearly $3.5 billion wiped off its market value by 6:20 a.m. ET. The stock has fallen more than 44 per cent this year.
Block on Thursday reported a loss of 36 cents per share in the second quarter, compared with a profit of 40 cents last year, and said it had slowed hiring and would cut its 2022 investment target by $250 million.
"The act of cutting spend suggests SQ is bracing for potentially weaker growth," JPMorgan analysts wrote in a note.
However, the brokerage maintained its "overweight" rating and $107 price target for the stock, citing underlying earnings potential from its buy now, pay-later business, which earned $150 million in gross profit in the quarter.
Investor enthusiasm over bitcoin and other digital currencies has ebbed this year, as red-hot inflation and the Federal Reserve's tightening of monetary policy have led to a selloff in risky assets.
That has hurt companies such as Block, which rode the bitcoin frenzy to post robust earnings last year.
Block shares slip after crypto winter dampens quarterly results
FE Team | Published: August 07, 2022 23:56:47
Block shares slip after crypto winter dampens quarterly results
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