Had you bought £500 worth of Square shares during its 2015 IPO – your investment would now be worth just under £10,000. For those unaware, this NYSE-listed tech stock is involved in the cutting-edge payment processing software. Its core divisions include Dessa, Weebly, and Stich Labs.
Although this fast-growing company is listed in the US, buying Square shares in the UK is a breeze. You simply need to open an account with a UK broker, deposit some funds, and decide how many stocks you wish to purchase.
In this guide, we’ll walk you through the process of how to buy Square shares online in the UK. Our walkthrough includes a discussion on the best UK brokers to do this with, alongside some factors to consider before making an investment.
Step 1: Find a UK Stock Broker
In order to buy Square shares online from the UK, you will need to find a broker that gives you access to the New York Stock Exchange. As the largest stock marketplaces in the world, it makes sense that there are heaps of providers for you to choose from. With that said, need to make considerations for a range of factors before joining a new broker – such as how much the platform charges in fees, what UK payment methods you can use, and whether or not customer support is sufficient.
To help point you in the right direction, below you will find two top-rated FCA-licensed brokers that allow you to trade or buy Square shares online.
1. eToro – Buy Square Shares Commission-Free
Most UK stock brokers in the online arena will charge you a premium to buy US-listed shares such as Square. Not eToro, though. On the contrary, this hugely popular online share dealing site allows you to buy shares in a 100% commission-free manner. Not only this, but the platform does not charge any ongoing maintenance fees.
This is the case with all 1,700+ stocks that the broker gives you access to. Its stock library covers 17 different markets – including the UK, US, Germany, Canada, and France. In terms of its Square stock offering, you only need to invest $50. This is fundamental, as the US tech stock currently has a share price of $175. As such, there is no requirement to purchase a full share at eToro. Instead, a $50 (about £40) purchase would get you approximately 28% of a single stock. This is known as ‘fractional ownership’.
Once you go through the quick and easy account registration process at eToro, you will be able to deposit funds with a good selection of payment methods. For those of you seeking an instant deposit, it’s best to stick with a UK debit/credit card or an e-wallet like Paypal, Skrill, or Neteller. Bank transfers are supported, too – but processing times can take a couple of days. Either way, the minimum deposit with this brokerage house is $200 – or about £160.
All deposits come with a 0.5% FX conversion fee at eToro, as you are funding your account in a currency other than USD. On the flip side, you won’t need to pay any stamp duty when buying Square shares at eToro, as US stocks are exempt. An additional feature worth mentioning quickly is that of the eToro copy trading tool. This allows you to copy a successful investor like-for-like by mirroring their portfolio. Finally, eToro is licensed by the FCA and your funds are protected by the FSCS.
- Super user-friendly online stock broker
- Buy stocks without paying any commission or share dealing charges
- 800+ stocks listed on UK and international markets
- Deposit funds with a debit/credit card, e-wallet, or UK bank account
- Ability to copy the trades of other users
75% of retail investor accounts lose money when trading CFDs
2. Plus500 – Best Commission-Free Platform for Trading Square Stock CFDs
If you are looking to place a more elaborate trade on Square, we would suggest checking out Plus500. This top-rated trading platform allows you to trade Square stocks in the form of CFDs. This means that you will be able to gain exposure to the firm’s stock price action without taking ownership. As you might already know, stock CFDs can also be traded with leverage in the UK.
If you are not a professional trader, then this comes with a cap of 1:5. In other words, you can place an order on Square stock CFDs with five times the amount you have in your account. What we also like about the CFD option at Plus500 is that you can choose from a buy or sell position. The former means that you think the price of Square stocks will increase, while the latter means the opposite.
This gives you heaps of flexibility and ultimately – the ability to profit from both rising and falling markets. An additional reason why Plus500 makes the cut for us is that it charges no trading commissions on any of its financial instruments. Not only does this include stock CFDs like Square, but other asset classes such as indices, oil, gas, forex, and even digital currencies. On top of super-tight spreads, this ensures that you can access your chosen trading market in a cost-effective ecosystem.
In terms of getting started, Plus500 is available online or via a native mobile app (iOS and Android). Opening an account takes just a few minutes and supported payment methods include debit/credit cards, Paypal, and a UK bank transfer. The minimum amount that you can deposit to get started is just £100. There are no fees to get money into or out of Plus500, albeit, a 0.5% FX fee does apply when accessing non-GBP markets. Finally, Plus500UK Ltd is authorised & regulated by the FCA (#509909).
- Commission-free CFD platform – only pay the spread
- Thousands of financial instruments across heaps of markets
- Retail clients can trade stock CFDs with leverage of up to 1:5
- You can short-sell a stock CFD if you think its value will go down
- Takes just minutes to open an account and deposit funds
- CFDs only
- More suitable for experienced traders
80.5% of retail investors lose money trading CFDs at this site
Once you have decided which UK share dealing account provider you wish to go with, you’re likely ready to buy some Square shares. However, we would strongly suggest performing some in-depth research on the company before proceeding. After all, the stock is still relatively new – with its IPO concluding as recently and 2015.
With this in mind, below we outline some important data on Square. This includes some background information on its historical stock price action to date, and what factors you need to look out for before making an investment.
What is Square?
Founded in 2009 by Twitter CEO Jack Dorset and Jim McKelvey – Square is US-based financial payment provider. In simple terms, the overarching aim of the company is to make the process of accepting debit and credit card payment easier for merchants.
Not only does this include online stores, but bricks and mortar businesses, too. Unlike other options in the market, Square claims that its underlying infrastructure offers payment services in the most cost-effective and straightforward manner.
For example, the Square Point-of-Sale division allows physical stores to accept and process payments via a smartphone application. This means that there is no requirement for shopkeepers to obtain bulky payment card machines.
In terms of the fees that it charges, this works out at 2.6% of the total transaction value alongside a token payment of $0.10. This does, however, increase to 3.5% and $0.15 if the merchant is required to insert the payment details manually. As of Q2 2020 – the Square mobile app has reportedly been downloaded by over 33 million businesses – which is huge.
It took just 6 years for the team at Square to take their pipedream from a privately owned company to a public stock. It’s IPO of November 2015 – which was facilitated by the New York Stock Exchange, initially priced the shares at $9 each. In turn, this valued the company at $2.9 billion.
This is actually less than the $6 billion that Square valued the company at from previous funding rounds. Nevertheless, it took less than 3 hours of day-one trading for Square shares to reach $13.60 – an increase of more than 51%. Once again, this is why tech-related IPOs are highly sought after by investors – as there are countless examples of stocks amplifying in value in their first day of trading (as well as examples of the opposite happening).
Since then, there simply has been no stopping the stocks – other than a short-term blip during the mass-market sell-off of March 2020 that impacted the vast majority of US shares. At the time of writing in October 2020, Square shares are priced at $175. This represents a 5-year increase of over 1,800%.
In terms of valuation, this stands at just over $77 billion. Interestingly, one of its main competitors – Paypal, has a market capitalisation in the region of $225 billion – which is approximately three times that of Square. With that said, Square claims to offer a simpler and more cost-effective way of accepting and transferring money than Paypal, so the upside is still potentially lucrative.
Although revenues are on the rise and crucially – the firm is generating operating profits, Square is yet to pay any dividends. This is likely to be the case for the foreseeable future, as the board are heavily focused on growth. This includes expansion not only into new global markets but products and services, too.
All in all, Square should be considered as a growth stock – much like Tesla, Draftkings, and Nikola. If you’re looking to invest specifically in dividend stocks, you’ll need to focus on blue-chip firms with an established and proven business model.
Whether or not you decide to buy Square shares will depend on your personal investment goals. For example, if you’re looking to invest in a company that is still at the very start of its corporate journey and thus – has significant upside potential, then Square is likely to suffice.
Alongside this is, however, a much higher risk/reward ratio. After all, Square is still a young company that faces huge competition from entities that have much larger cash reserves at their disposal – notably, Paypal. On the other hand, Square won’t be for you if you are seeking a high-grade stock that that has a long-standing track record in their respective field.
Taking all of the above into account, it’s crucial that you do some homework before you buy Square shares. To help you along the way, below we discuss some of the most important factors facing the company right now.
One of the Best Performing Stocks of 2020
We noted earlier how Square investors that backed the firm during its IPO are now 1,800% richer – which is great. However, we would argue that its most recent stock market performance is even more impressive. Why? Well, very few stocks are currently worth more than they were when the coronavirus saga came to fruition.
On the contrary, most have failed to get back to pre-pandemic levels. Alongside other notable tech firms like Tesla and Amazon, Square does not sit within this category. Instead, Square’s continue to explode in 2020. For example, the shares began the year at $63 per stock.
Fast forward to the first week of October and the same shares are worth $175. This puts the shares just below the all-time figure of $182 that it achieved in September. Ultimately, this highlights that not even a global pandemic can get in the way of Square’s stock market momentum.
Fantastic Q2 2020 Earnings
Any seasoned stock investor will tell you the importance of quarterly earnings reports. After all, this gives you a full bird-eyes overview of not only how the company has performed over the prior three months, but how these results compare to market expectations. In the case of Square and its Q2 2020 release, the results were very, very positive.
Firstly, the firm reported sales of just over $1.92 billion for the quarter. This translates into a 64% leap in comparison to the prior 12 months. Square account deposits increased by 250% to $1.7 billion, and active users shot up to well over 33 million. The Square Cash App division, in particular, saw tremendous growth.
For example, profits grew 168% in comparison to the previous year, and ‘stored funds’ grew by 86%. The latter refers to the percentage of deposits that remain in the Square Cash App, as opposed to being spent or transferred. All in all, its most recent earnings reported largely smashed through market expectations. In turn, this only amplified the firm’s 2020 upward trajectory.
Product Range Continues to Grow
One of the most appealing aspects to Square as a growth stock is that it is continuously adding new products, services, and features to its portfolio. This goes far and beyond just merchant payment processing. For example, the firm has since entered the multi-billion dollar cryptocurrency exchange sector by allowing consumers to easily buy and sell Bitcoin through the app.
Additionally, the app can now also be used to trade stocks at the click of a button. Then you have the newly launched short-term loan service, which allows Square users to borrow up to $200. This in itself could lead to a huge marketplace of its own – especially when you consider just how many users have the Square app installed on their smartphone.
Make no mistake about it – co-founder and current CEO Jack Dorsey has been there and bought the t-shirt. That is to say, the entrepreneur took Twitter from a developer’s pipedream to a leading social media giant with a current market capitalisation of over $35 billion.
Interestingly, this is less than half of what Square is currently worth, albeit, it shows that Dorsey has a proven track record of taking a start-up to a multi-billion dollar stock market powerhouse.
There has been no impact on the fact that Dorsey is CEO of both Twitter and Square concurrently – and we see no reason for this to change any time soon.
Step 3: Open an Account and Deposit Funds
Once you have had a chance to digest both the pros and cons of making an investment into Square, the next step is to open an account with your chosen share dealing site. Depending on the broker you opt for, the process shouldn’t take you more than 5 minutes.
With that said, getting started with an online trading account can be an intimidating process if you have never done it before. As such, we are going you walk you through the steps required with our top-rate FCA broker eToro.
So, to get the ball rolling head over to the eToro website and look out for the ‘Join Now’ logo. Initially, you’ll be asked for your full name, email address, and to choose a username and password. Upon clicking on ‘Create Account’, you’ll be taken to the next stage of the application.
This is where you’ll need to provide your home address, date of birth, national insurance number, and mobile phone number. Next, eToro will ask you to upload a copy of your government-issued ID (passport or driver’s license). Additionally, the broker needs a copy of a recently issued bank account statement or utility bill. This is to ensure that eToro complies with anti-money laundering regulations.
Note: If you do not plan on depositing more than $2,250 – you can upload the above documents at a later date.
Finally, you will need to make a deposit. Ensuring that you meet a $200 minimum, you can choose from a debit/credit card, e-wallet, or bank account transfer.
As soon as you have opened an account and made a deposit, you can proceed to buy Square shares. All you need to do is enter ‘Square’ into the search box at the top of the page, and click on the first result that pops up (like the below).
Then, click on the ‘Trade’ button.
In doing so, you will see an order box load up. Here, you simply need to enter the amount that you wish to invest. You don’t need to buy a full share, as eToro allows you to invest from just $50.
To complete the investment process, click on the ‘Open Trade’ button.
Note: If you buy Square shares outside of standard NYSE trading hours, the order will be processed when the markets reopen. If this is the case, the confirmation will read as ‘Set Order’ as opposed to ‘Open Trade’.
It’s difficult to get away from the upside potential associated with this stock. Sure, you’ve certainly missed the opportunity to purchase the stock at sub-$10 – but that isn’t to say that Square shares are anywhere near their ceiling point. On the contrary, the firm is still growing at a rapid pace, with new markets, products, and services being introduced on a regular basis.
With that said, you should never purchase shares on the back of somebody else’s viewpoints. Instead, the decision needs to be based on independent research carried out by you.
In summary, Square is certainly one of the hottest stocks of 2020. While much of the market has been negatively impacted by the pandemic – it’s been up, up and away for Square. If you plan to jump on the bandwagon with this growing company, eToro allows you to buy Square shares commission-free. It takes minutes to set up an account and deposit funds, and the platform is regulated by the FCA.
Simply click the link below to get started!
75% of retail investor accounts lose money when trading CFDs with this provider.
What does Square do?
Square is a financial payment provider that allows merchants to accept debit/credit card payments via its mobile app. The FinTech firm has since moved into heaps of other ventures - such as Bitcoin exchange services and even short-term loans.
What stock exchange is Square shares listed on?
Since its IPO in 2015, Square shares are listed on the New York Stock Exchange.
How much were Square shares originally worth ?
When the company went public in 2015, you would have paid just $9 for a single Square share. Fast forward to October 2020 and the very same shares will cost you $175.
Can you short Square shares?
Think that Square is heavily overvalued, or that its stock price is growing just a little bit too fast? If so, you can easily short-sell its stock by opening an account with an online trading platform that supports CFDs. eToro, for example, allows you to short Square shares with leverage of up to 1:5.
How do you buy shares in Square?
You'll need to open an account with a brokerage platform that gives you access to the New York Stock Exchange. Then, you simply need to deposit some funds and decide how many shares you wish to buy. By completing the process with eToro, you can buy Square shares commission-free.