Twitter founder Jack Dorsey's payment firm Block, formerly called Square, has seen a downgrade, dragged down by none other than bitcoin (BTC) - or rather, the company's "preoccupation" with it.
Investment bank Mizuho downgraded Block from “buy” to “neutral”, arguing that the company is significantly focused on BTC despite it contributing less than 5% of Block’s gross profit.
Therefore, even though BTC transactions account for a small percentage of gross profit, they "seem to disproportionately preoccupy management's attention," analyst Dan Dolev was quoted by MarketWatch as stating in a Mizuho note.He added that,"Assessing the stock's behavior shows it closely tracks bitcoin.
This is unfortunate as it distracts both management and investors from focusing on SQ's broader ecosystem."Per Dolev, Block "still has enormous potential," but he argues that the company has several factors to worry about, while it's also not taking advantage of its opportunities.Read more on cryptonews.com