Square stock plummets after foray into Bitcoin attracts jeers

Bitcoin may be up 850 percent this year, but it’s been a mixed bag for Jack Dorsey.

Square, the payment company run by the 41-year-old tech entrepreneur, saw its shares tumble 16 percent on Monday, to $41.02, after an influential Wall Street firm said the San Francisco company’s foray into bitcoin trading was hardly worth the hype.

It was Square’s largest single-day selloff.

The company’s shares have soared 258 percent this year through last week — the last 67 percentage points coming in the past seven trading days after Square announced that it would allow some users to buy and sell the cryptocurrency on its platform.

Bitcoin, which is notoriously hard to buy for regular investors, was trading at $9,705.22 on Monday evening — up 4 percent on the day. On several Korean exchanges, bitcoin passed the $10,000 plateau.

The rise in the price of bitcoin placed the value of all cryptocurrencies above the $300 billion mark for the first time.

Some analysts worry that the giant surge is hype and have compared the digital currency to previous bubbles.

Square investors, it seemed, didn’t care — pushing shares of the payment system company up 23 percent since its Nov. 15 bitcoin announcement.

“When it’s related to cryptocurrency, people do get a little bit excited,” Steven Kwok, an analyst at Keefe, Bruyette & Woods, told The Post. “That probably helped drive the stock up.”

“I confess it’s an area … that to me feels speculative, but you might call me old or old-fashioned,” strategist Bob Doll told CNBC. “It’s been an amazing run, has it not?”

But that high — at least for Square — came crashing down on Monday when BTIG analyst Mark Palmer said that the feature wasn’t worth as much as Wall Street thought it was.

“It is not optimal from a risk standpoint for Square to have its fortunes tied to those of a cryptocurrency that has frequently displayed extreme volatility,” Palmer wrote in a note, which also slashed the target price to $30.