Shares of block (NASDAQ:SQ) shares are rising 2% today following a notable insider purchase.

On 6 August Sequoia Capital purchased 434,405 SQ shares at average prices ranging from $56.85 to $57.82. While director ROelof Botha’s name is listed in the Form 4 disclosure, Sequoia made the purchase. Form 4 is attributed to Botha because he is a partner at Sequoia and also a director at Block.

This is the second time Sequoia has announced the purchase of SQ through Botha in the past year. The previous purchase of 540,646 shares was made between November 8 and November 13, 2023. These shares were purchased between $50.88 and $50.99 and were worth $27.51 million.

Sequoia Capital acquires SQ shares valued at $25 million

Other insiders at Block were not exactly bullish on their insider transactions. Last year, insiders bought $52.51 million worth of SQ, although all purchases are attributed to Sequoia through its connection to Botha. As for sales, insiders sold $44.35 million worth of shares last year, for a total value of $8.16 million.

SQ stock has struggled since 2021 and is miles away from its high of about $276 this year. Block is not alone, as many other fintech companies, such as SoFi (NASDAQ:SOFI) And upstart (NASDAQ:UPST), have declined significantly from their peaks in 2021.

This is because the fintech industry, especially payments, is highly competitive and continues to be dominated by established players such as visa (NYSE:V) And MasterCard (NYSE:MA). Block’s Cash App offering is also in direct competition with Zelle and PayPal (NASDAQ:PYPL) Venmo. In other words, it is extremely difficult to find a sustainable moat in the fintech sector.

Block Fights

In addition, Block’s revenue growth has shown a steady downward trend since the first quarter of 2023. In the second quarter, revenue increased 11.21% to $6.16 billion, falling short of analysts’ estimates of $6.28 billion. Adjusted earnings per share of 93 cents beat the estimate of 84 cents, with gross profit increasing 20% ​​to $2.23 billion.

Block returned to profitability in the fourth quarter of 2023 after eight consecutive quarters of negative GAAP earnings per share. That’s a good start, but the company still has a long way to go.

At the time of publication, Eddie Pan held a LONG position in SQ and PYPL. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing guidelines.

At the time of publication, the editor in charge did not hold any positions (either directly or indirectly) in the securities mentioned in this article.