Block pullback on regulator probe report ‘seems overdone,’ says BTIG

BTIG notes Block shares traded down about 9% today following a news report that stated federal prosecutors are examining financial transactions at the company and claimed compliance lapses within Block’s Cash App and Square segments. While the report is “admittedly ugly given the specific references of terrorists, sanctioned states, and a murkiness about the extent of management’s involvement,” the story is largely consistent with previously reported concerns regarding Block’s know your customer and anti-money laundering processes and internal safeguards, says the analyst, who thinks the downward move today is “overdone” and expects management to “firmly address the accusations” during the company’s Q1 earnings call tomorrow. BTIG has a Buy rating and $90 price target on Block shares.