Mizuho: Square CFO Steps Down, Can Mobile Payments Platform Survive?

Recently, Square issued some news that was nothing short of earth-shaking for those who followed the mobile payments company. Its chief financial officer, Sarah Friar, would be leaving the company to become the CEO of Nextdoor. A big step for her, but a big hit to Square. While she would remain with Square for pretty much the rest of 2018, it’s still a shock. However, how much damage will it do to the company? Mizuho filled us in on its outlook by way of Thomas McCrohan.

Naturally, such a step as this wouldn’t go without impact. The CFO leaving must inevitably do at least some damage. Mizuho adjusted its price target for Square accordingly, lowering it to reflect the new uncertainty surrounding Square’s operations without its CFO.

A major figure in the company suddenly leaving would be bad enough—what does she know that we don’t?—but the fact that it was Sarah Friar that left makes a bad situation even worse. Mizuho considered Friar—and it was far from the only entity who held such an opinion—the “key instrumental force” that helped build Square’s reputation with the investment community.

With that in mind, though, Mizuho acknowledged that Friar isn’t the only gifted person at the company, and Square’s “human capital advantage” is still present. Additionally, the firm’s culture is set to be what creates the most value over the long term, and that’s still in play.

Certainly, the loss of Sarah Friar is a blow. A major driving force, a C-level staffer, and someone who was instrumental in building Square as a whole is out of the picture. And indeed, some suspicious minds might wonder what’s lurking beneath the surface that ran her off. Of course, looking at why she left is vital here; even if Square was a flawless organization, it’s hard to turn down the CEO slot anywhere.

As long as investors keep that point in mind, Square’s hit should be minimal. It’s going to need to get someone in there who’s a match for Friar, of course, or it might suffer that way. With the right new CFO in place, though, the loss of Friar may just be a small hiccup.