Block pares losses as analysts say Dorsey's involvement after Square CEO exit is positive
Shares of Block (NYSE:SQ), the digital payments firm, fell more than 1% in premarket trading following the announcement that Alyssa Henry, CEO of its Square business, is departing.
Henry has worked at Block for over nine years. Jack Dorsey, co-founder and former CEO of Twitter, is set to take over the role.
Block shares initially fell nearly 3% on the announcement, before analysts weighed in positively on Jack Dorsey's involvement in the leadership position. The stock previously hit a 52-week low.
“While it is unfortunate to see the departure of the long-time leader, we view the decision to place Dorsey at the helm (however temporary/permanent it may be) as an indication of the level of importance placed on the Square business in the context of the broader Block ecosystem,” KeyBanc analysts said in a note.
Dorsey has been spending more time on Square's business over the recent months and will now lead the strategy and direction of the Square segment.
“We believe Alyssa was viewed favorably by investors, and the departure after only six months as named CEO (but nine years as acting) is surprising,” said BTIG analysts.
“While we wouldn't consider oversight by Jack Dorsey to be a negative, the reaction isn't surprising given the sentiment surrounding the name.”
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