Square Inc. $SQ could be one of those magic Silicon Valley magic stocks. It just broke out the price range for the last 15 months due to its earnings report and the prospects of growths in the areas such as business lending and point of sale, in addition to the mobile payment processing. It is not profitable yet, but the streets have given high valuations.We at PricenTime.com believe SQ could be a speculative investment position. The future business direction/growth and price target are anyone’s guess. It is simply too new to know.
But we like to open a speculative investment position based on the following reasons:
- No one knows the valuation and business direction of google and amazon at the beginning. But the investors who took a gamble on them have been rewarded handsomely.
- We don’t know if SQ has the potential to become one of those tech giants. The current CEO Jack Dorsey is a college dropout, also has giant ego. He runs Twitter and Square simultaneously. Twitter stock is not doing well, not as the rest of the social media stocks.
- The future of financial services such as lending and payment processing will be a totally different landscape than the traditionally bank dominated fields.
- Square might be able to become a giant tech leader in the financial service industry due to its small size and lead in artificial intelligence, etc..
- There are vast unknowns about the stock. That’s why we call it speculative investment position.
- The general market condition is healthy. The retail investors have not developed speculative appetite yet.
- Technically, it is in the 2nd week of the current weekly cycle. The trend is bullish. If we choose a measured move from the breakout, the next price target could be 24.
- The ideal entry price should around 16.
- Good luck with your bet!