In the past 48 hours, the stock price of Square, a mobile payment company operated by Twitter CEO Jack Dorsey, surged by more than 15 percent, after recording a 10 percent gain on January 7.

The short-term recovery of technology stocks, with giants in the likes of Microsoft, Amazon, and Alphabet recording gains in the range of three to ten percent, led the U.S. stock market to initiate a strong rally on two straight days.

What Triggered Big Spike of Square?

A ten percent daily increase in the stock price of a company valued at tens of billions of dollars is rare.

But, if the past performance of Square, especially in the third quarter of 2018 is considered, the recovery of the company’s stock price in the magnitude of today’s gain is not all that surprising.

On Oct 10, 2018, Sarah Friar, Square’s then chief financial officer resigned from her position at the company to become the CEO of social networking service Nextdoor. Following the resignation of Friar, the stock price of Square plunged by eight percent on a single day.

In a note to employees, Jack Dorsey wrote at the time:

I’m saddened by the news. I was unrealistically expecting to be working with Sarah well into our late 90s (swapping the standup tables for rocking chairs). Unrealistic because I knew of Sarah’s lifelong ambition to run her own company.

The resignation of Friar was followed by a decent performance by the company in the last quarter of 2018. The firm beat the expectations of analysts with quarterly revenue of $431 million. But, it fell short on earnings guidance.

Still, the stock price of Square recovered by 10 percent on November 17, as investors saw strong momentum in the business and the rapidly growing adoption of the Cash App, possibly fueled by the app’s integration of Bitcoin that was successful in driving users from the cryptocurrency market and millennials.

Square performed poorly throughout the past three months due to the bear market experienced by the Nasdaq Composite and the S&P 500. The Dow Jones Industrial Average was close to falling into bear market territory in December but avoided a 20 percent drop with an abrupt recovery.

On January 3, Square officially appointed former Blizzard CFO Amrita Aruja as the company’s new CFO, a major factor that contributed to the short-term performance of the firm’s stock.

Dorsey said:

Amrita brings the ability to consider and balance opportunities across our entire business, and she will help strengthen our discipline as we invest, build, and scale.

Strong Month Ahead For Square and Dow Jones

The Cash App has surpassed Facebook, Twitter, and other applications on the Apple App Store to become the most widely utilized free mobile application earlier this year.

With sustainable growth of the Cash App and the appointment of Aruja, Square is expected to record strength in the first two quarters of 2019.

The newly released jobs report and the Federal Reserve’s patience on the Fed rate have also allowed the Dow Jones to stabilize and recover and have already started to pose a positive impact on technology stocks.

Featured Image from JD Lasica/Flickr