Square Inc. shares plunged 8.5 per cent in pre-market trading after the firm said longtime Chief Financial Officer Sarah Friar is stepping down. Analysts expect the news to continue to pressure the stock in coming months as investors cope with uncertainty from the surprising departure of a highly respected executive.

The firm has big shoes to fill, as analysts say Friar essentially ran the business and gave Jack Dorsey the flexibility to serve as chief executive officer of both Square and Twitter Inc. She was also key in building credibility with investors and positioning the company to exceed Wall Street’s earnings expectations.

Here’s what analysts are saying:

BTIG, Mark Palmer

  • Friar’s exit introduces substantial uncertainty into the business that may further pressure the stock price, as she was very respected by Wall Street and the market, and was the public face of the company.
  • Her departure may spur worries that the firm will soon lack full-time leadership, and will probably “intensify the spotlight” on Dorsey’s role as CEO of both Square and Twitter.
  • BTIG reiterated its sell rating on Square and Street-low US$30 price target.

Susquehanna, James Friedman

  • The news is shocking and “caution is in order,” but it’s encouraging that the former CFO of Goldman Sachs is leading the search for a new financial chief.
  • Good candidates could include Square Capital head Jackie Reses, Square Cash head Brian Grassadonia, Worldpay Inc. CFO Stephanie Ferris, and First Data Corp. CFO Himanshu Patel.
  • Susquehanna reiterated its positive rating and US$77 price target.

Citi, Peter Christiansen

  • True or not, there’s a perception that Friar “essentially ran the company,” and her leadership has been key in giving Dorsey leeway to work as a dual CEO.
  • Square’s post-market decline Wednesday points to a 6 per cent to 10 percent drop in the stock price, which “sounds generous” given the news. The CFO search will probably hinder the stock’s rebound potential for the next few weeks or months.
  • That said, the search for a new CFO is in capable hands, and there’s now a chance to bring in someone with more M&A experience and/or regulatory talent.
  • Citi reiterated its neutral rating and US$67 price target

Mizuho, Thomas McCrohan

  • Friar was “the key instrumental force that built overall credibility with the investment community,” but Square’s human-capital advantage extends beyond one person.
  • Mizuho reiterated its buy rating and cut its price target to US$90 from US$95 given the new uncertainty.

Guggenheim, Jeff Cantwell

  • The CFO’s departure is a near-term negative, as Friar was among the best CFOs in the industry; her exit leaves “sizeable shoes to fill.”
  • Square should still report solid third-quarter results, but there are now long-term questions around whether the firm’s vision will stay intact and whether it can find “another strong operator in the same mold as Ms. Friar.”
  • Guggenheim reiterated its buy rating and $100 price target.