Square vs Twitter: what’s a better pick for investors?

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Dec 2, 2021
  • CNBC's Jon Fortt builds a bullish case for Square Inc on "Squawk Box".
  • He explains what it will take for Twitter Inc to revive its stock.
  • Shares of both companies are in the red on a year-to-date basis.

Jack Dorsey picked Square Inc (NYSE: SQ), now called Block, over Twitter Inc (NYSE: TWTR) this week, and CNBC’s Jon Fortt says investors should do the same simply because “you go where Jack goes”.

Fortt builds a bullish case for Block on ‘Squawk Box’

This morning on “Squawk Box”, Fortt stated several reasons why he sees Block as a stronger fundamental story.

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Block has a chance to lead in several digital payments markets where it competes, while Twitter is stagnant in the social space. Block’s market cap is about $90 billion, nearly three times Twitter’s and for good reason. Unlike Twitter, Block has had healthy momentum and is investing for more.

Other reasons why he picked Block over Twitter include the latter’s stock price that has tumbled back to levels where it debuted on the NYSE in 2013. Twitter’s earnings came in significantly lower than expected in its latest reported quarter.

Catalysts that could drive future growth for Block

In comparison, Block reported a 27% annualised revenue growth in its recent fiscal quarter and Fortt is convinced its businesses are strong enough to sustain the momentum in the future. He added:

There’s the small business transactions unit, Square; and consumer transactions unit, Cash App. Then you’ve got the innovative Bitcoin work, the pending Afterpay acquisition and the Tidal business for empowering musicians with digital transactions tools.

On the flip side, however, Fortt agrees that the bar is low at Twitter and if its new CEO Parag Agarwal, with the new chairman Bret Taylor can figure out a way to drive user growth, the story could be much different for TWTR.

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