Block is reportedly weighing job cuts of up to 10%, a move investors see as part of a broader reset after weeks of stock pressure.
- Shares of Block were up nearly 3% in overnight trading on late Sunday and are heading for their second straight day of positive moves.
- According to a Bloomberg News report, Block was informing hundreds of employees that their jobs may be eliminated during annual performance reviews.
- Cantor Fitzgerald noted that, with the early innings of Block's turnaround behind it, the company’s momentum is building.
After a second week in the red, Block Inc. shares could see a sharp turnaround on Monday following reports that the payments firm is considering headcount reductions as part of a broader overhaul.
Shares were up nearly 3% in overnight trading on Sunday and are on track for a second straight session of gains if the momentum holds during the opening day of the week. Block's stock rose nearly 5% on Friday, its strongest single-day gain in a month.
Headcount Reduction At Block
Block, which was co-founded by Jack Dorsey, is a payments firm that owns the applications Square, Cash App, Afterpay, TIDAL, Bitkey, and Proto. The company is known for helping customers buy bitcoins by purchasing them first and selling them at a lower premium.
According to a Bloomberg News report on Saturday, citing people familiar with the matter, the company was informing hundreds of employees that their jobs may be eliminated during annual performance reviews. The report added that up to 10% of the total workforce would likely be impacted. Block had nearly 11,000 employees as of late November.
In late January, Cantor Fitzgerald initiated coverage of Block with an ‘Overweight’ rating and $87 price target. The firm noted that, with the early innings of Block's turnaround behind it, momentum is building, as new product initiatives demonstrate that Block's innovation engine is "firing on all cylinders.”
Cantor Fitzgerald said the company's medium-term guidance was impressive, but execution now matters.
What Is Retail Thinking?
Retail sentiment on Block was in the ‘bearish’ territory, compared to ‘neutral’ a month ago, with message volumes at ‘high’ levels, according to data from Stocktwits.
A bullish user on Stocktwits noted that the layoffs were good for Wall Street.
In the last seven days, retail message volumes on Stocktwits for Block jumped 250%, with more than 180,000 followers on the platform.
Shares of Block have lost more than 34% of their value.
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