Jack Dorsey started the week by stepping down as CEO of Twitter . On Wednesday, he announced that Square , where he remains CEO, has changed its name to Block.
But don’t take my word for it. Just head over to Square’s investor relations website. There, you’ll find that the transformation to Block is complete, even if there’s an asterisk pointing out that Square Inc. (ticker: SQ) is still the legal name of the company. Dec. 10 is offered as an estimate for when the name will officially change to Block Inc. Square stock is down 0.2% in premarket trading Thursday.
The investor-relations page also has a handy paragraph explaining the concept behind the new name, if not exactly a reason for the change:
Block (formerly Square)* is Square, Cash App, Spiral, TIDAL, TBD54566975, and our foundational teams such as Counsel, Finance, and People that provide guidance at the corporate level. These are our building blocks, united by our shared purpose of economic empowerment. We’re creating tools to help expand access to the economy.
It’s been a busy week for Dorsey, who stepped down as CEO of Twitter (TWTR)—something many investors have been calling on him to do for a while now—and now he can focus his attention on Square, er, Block. Its press release cited the growth of the company, which extends far beyond Square these days. And the new name makes a strange kind of sense. A block can be seen as a 3-D representation of a Square. And Dorsey has become increasingly focused on crypto, so the name is likely intended to conjure up images of the blockchain.
“[We believe the change will be interpreted by many observers as an indication that the company will be leaning further into its initiatives focused on crypto and decentralized ledger technology,” writes BTIG analyst Mark Palmer, who rates the stock a Buy with a $320 price target.
Square is just the latest tech company to change its name, after Mark Zuckerberg changed Facebook to Meta Platforms (FB) in October. Meta Platforms stock has dropped 2% since announcing the change.
Square needs to hope that it fares better. The stock was a darling of the first Covid wave, with its stock gaining 640% from its low of $38.09 on Mar. 20 to its record high of $281.81 on Aug. 5. Since then, the stock has dropped 31% to $194.50, the sixth time it’s traded near this level over the past year or so.
Now it looks a lot like support. If the stock can’t hold here, there’s a good chance it has a lot further to fall.
Name change or no.
Write to Ben Levisohn at [email protected]
