Block’s shares are sinking on Monday…
The post Why is the Block share price tanking 5% on Monday? appeared first on The Motley Fool Australia. –
The Block Inc (ASX: SQ2) share price has started the week deep in the red.
In morning trade, the payments giant’s shares are down 5.5% to $113.21.
Why is the Block share price tumbling?
The main catalyst for the weakness in the Block share price today has been a poor night of trade for its NYSE listed shares on Friday.
Given how Block’s Australian shares are inextricably tied to its NYSE shares and move in tow with them, a poor night on Wall Street will almost always lead to an equally poor day on the ASX boards.
So, with the US tech sector and Block taking a tumble on Friday night after the bear market rally ran out of steam, today’s decline was inevitable.
Not helping matters is news that the payments giant’s shares will soon be kicked out of the exclusive ASX 50 index.
On Friday, S&P Dow Jones Indices announced that Block would be removed on 20 June when the index rebalances. It will be replaced in the ASX 50 club by mining and mining services company Mineral Resources Limited (ASX: MIN) from that date.
Where next for the company’s shares?
While the market may not be too enamoured with the Block share price right now, one leading broker sees plenty of upside.
A recent note out of Macquarie reveals that its analysts have an outperform rating and $180.00 price target on the company’s shares.
Though, as mentioned above, whether the Block share price reaches that level will depend entirely on where its NYSE listed shares go over the next 12 months.
Shareholders will no doubt be hoping that investors on Wall Street become as bullish as those at Macquarie in the near future.
The post Why is the Block share price tanking 5% on Monday? appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.