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Comment by mdjt | Hacker News Reader

I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%.

Don't be wary ;)

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Interesting that a drop in oil price would correlate. Why is this and how does it impact a completely unrelated industry?

IMO nothing is unrelated when it comes to the markets. A fall in a primary sector of the economy will lead to uncertainty in every other sector.

I'm not an economist, but my understanding is that the price of oil does not directly impact the valuation of these companies, per se, but that growth-oriented companies (especially) and oil sales depend on a strong global economy.

When the price of oil falls, that indicates that people are pulling back on oil/gas/etc purchases due to constrained budgets, reduced business/operations, etc. (and/or that people buying the oil predict that others will cut back on those things in the near future)

I'd think its because of the increased supply of oil.

It's probably not just oil, but rather a general reduction of risk from investors. People are worried about the global economic climate and are pulling their money out of stocks and putting it into more predictable, dependable assets like gold and treasury bonds, which tend to have much lower yields but also much less risk of tanking in value during bad times.

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