Let’S talk about it hi all my name is greg and i make videos about the stock market and options trading today, i’m. Going to be talking all about square, so first i’m going to go over some of the highlights that i’ve noticed over the past few months that sent their stock skyrocketing. Then i’m going to talk about their upcoming earnings report and my expectations for that and finally, at the end of this video i’m, going to give you some potential drawbacks to this company, including jack dorsey himself, the ceo selling 100 000 shares of square each week. Definitely stick around to hear the details on that, but before we get into it, if you enjoy this type of content, where i put in a ton of research into these different stocks, i’d appreciate. If you leave a like on this video and subscribe, if you’re new to the channel with that out of the way let’s get into the highlights, the first highlight that i want to talk about is a bunch of new users, possibly being added to cash app. Now, cash app is one of their main drivers in terms of their revenue. What we’ve seen over the past few weeks, at least, is a ton of new retail investors piling into the markets because of all the social media, craze that’s been going about with stocks like gamestop and amc. On top of that, we also had robin hood, on the other hand, block the buying of these specific stocks and a lot of people started to boycott robin hood and head to new brokerages.
So possibly, we could see a whole lot of people leaving robin hood and moving over to cash app cash. App was the number one in finance on the app store for a while before robin hood took over over the past couple of weeks. So there definitely is a lot of potential that cash app added a whole lot of new users over the past month. If they added all these hypothetical new users are going to be raking in a ton of revenue and another way, they’re making a ton of revenue likely is bitcoin. Last quarter alone, bitcoin made up 1.6 million dollars in revenue for their last earnings report and with bitcoin soaring up from about twenty thousand dollars all the way to around thirty five thousand dollars. Now, over the past few months, i have a feeling that this revenue is going to increase even more and the way the cash app makes revenue off of bitcoin is by charging you a fee. Every time you want to buy bitcoin, you have to pay a two percent fee. So if i want to buy a hundred dollars, a bitcoin right now, i’d have to pay two dollars in fees now, there’s. Definitely a lot of better brokerages in terms of fees for buying into bitcoin and other cryptocurrency, but cash app makes it super simple, and a lot of people like that, but overall, with bitcoin rising by about 75 over the past few months, there’s, probably gon na, be A whole lot of new revenue coming in from their purchase of bitcoin.
I don’t know if they’re making any money on the seller bitcoin, because personally, i haven’t sold any of my bitcoin, but they might potentially make revenue off of that as well. If they made a ton of new revenue based off of bitcoin buying and selling i’d expect their next earnings report to be an absolute blowout. Another potential catalyst upcoming for square is gon na be stimulus, and this is something they talk about in their last earnings call. But essentially, if we get new stimulus, people that have a cash app account can have a direct deposit right into their cash. App and square makes a whole lot of revenue based on this. So if we do see another round of stimulus and 1400 stimulus checks, as we’ve been expecting, i’d expect a huge move off of square stock. And finally, the last bullish catalyst that i want to talk about is paypal’s earnings, and this is what’s known as a sympathy. Trade, what a sympathy trade is is when one stock goes up or down by a ton. Related stocks might move along with it. This is kind of like what we saw with paypal and square this week. Both of them have surged up tremendously with square going from 200 to 240, almost just within the past couple of weeks and honestly, there might be a reversal point coming up very soon with their earnings report. Let’S talk about that. According to earnings whisper wall, street estimates are set at 24 earnings per share earnings whisper themselves, have a 34 earnings for share expectation and me personally.
My expectations are 27 earnings per share over the past two quarters at least we’ve seen positive earnings per share, and i don’t expect us to go back into negative territory, especially with bitcoin going up so much over the past few months and the addition of the 600 Stimulus checks that we got back in late december and early january, as i talked about earlier, bitcoin contributed 1.6 million dollars worth of revenue in their last earnings report, with bitcoin soaring up by a hundred percent there’s likely to be a whole lot. More of that now, i’m not expecting the bitcoin revenue stream to double, but i think it would be realistic to see this jump by 25 to 50. If this happens to be the case, we could potentially see bitcoin revenue being as high as 2.4 million dollars, which is really going to help out with their earnings per share. And finally, the last thing that i want to talk about and what i think is a drawback when it comes to their next earnings report is kind of the lack of stimulus square talked about this in their last earnings call and basically what they said. If there’s no stimulus or if there’s, not enough stimulus, they could see a lack of growth for their cash app. Looking ahead, while the team has continued to execute, there remains a wide range of outcomes related to government inflows and how consumer behavior normalizes in 2021, which could lead to cash up gross profit decelerating during the remainder of this year and into 2021.
. Given cash act, incredible growth here to date in 2020, we will laugh particularly challenging comparisons in the second and third quarter of next year. To my knowledge, though, i don’t think they saw a lack of growth in their cash app, considering they were number one in the app store for a while before robin hood took their place a couple weeks ago. But this might be something that you want to keep in mind, with a lack of stimulus and congress continuing to contemplate the 1400 stimulus checks and whether we can afford it in the budget. If this doesn’t end up going through, we might see square stock, do a whole lot of nothing like we saw them do back in december and january, but if we do get these fourteen hundred dollar stimulus checks, as i talked about earlier, there’s gon na be a Whole lot of direct deposits into cash out from the users that have this, and this is gon na end up leading to a ton of growth for square and our earnings for next quarter. Not this upcoming one is going to be really really good, and the final thing that i want to talk about to close out this video is insider selling and jack dorsey selling 100 000 shares of square each week. Now don’t worry, like i said earlier. This is all just part of a plan, but it is something that’s going on right now and we don’t know when this might end yet last time they mentioned anything like this was back in 2016 and they actually had a press release regarding it.
But for this one for some reason, they don’t have any press regarding this trading plan, but after looking into their sec filings and looking through all the form fours with all the insiders selling out of their shares. I found this important tidbit. The sales reported in this forum iv were effective pursuant to a rule 10b51 trading plan adopted by dorsey revocable trust. Now again, we don’t have the details as to when this is going to end. But all we know right now is that jack dorsey is selling 100 000 shares a week indefinitely. They could cut this plane off anytime. They want, according to the 10b51 rule, but we really just don’t know when that’s gon na happen. So this is definitely something important to try to keep in mind. We need to figure out where exactly this money is going. My speculation is that all this money that they’re making from the sell of square might be going into bitcoin. I don’t know this to be a 100 fact, but i do know that square is looking to add bitcoin as a cash equivalent to their balance sheets.