In September 2017, one year before Eventbrite (EB) went public, Square (SQ) made a strategic partnership with the hot ticketing startup that included a $25 million investment. When Eventbrite went public, Square’s investment converted to common stock and rapidly doubled in value, giving Square a gain of $37 million in Q3 2018.

But what the public markets giveth, they can also taketh away.

Eventbrite stock has been hammered in 2019, now down 36% since Eventbrite’s September IPO.

Due to an accounting rule change by FASB (Financial Accounting Standards Board) in December 2017 (ironically, just a few months after Square’s investment in Eventbrite), public companies must re-value their equity stakes in other companies on a quarterly basis.

The rule means Square has to disclose its new “mark-to-market valuation” of its Eventbrite investment in each quarterly earnings report. And with Eventbrite’s rough ride on the public market, the stake has, for the moment, turned sour for Square.

In Q4 2018, Square attributed a $17 million loss to its Eventbrite stake. In Q1 2019, Square saw a $14 million loss from its stake.

Warren Buffett hates the rule.

In his annual letter to Berkshire Hathaway shareholders last year, Buffett warned that the new rule “will produce some truly wild and capricious swings in our GAAP bottom-line. Berkshire owns $170 billion of marketable stocks (not including our shares of Kraft Heinz), and the value of these holdings can easily swing by $10 billion or more within a quarterly reporting period. Including gyrations of that magnitude in reported net income will swamp the truly important numbers that describe our operating performance.” In this year’s letter, he reiterated, “Neither Berkshire’s Vice Chairman, Charlie Munger, nor I believe that rule to be sensible.”

Square’s Eventbrite problem may not get better for a while. Eventbrite’s Q1 earnings report on Wednesday missed on top and bottom lines and gave lower Q2 guidance. The stock fell 26%.

Of course, Square is invested in Eventbrite for the long haul, and Eventbrite’s full implementation of Square as its biggest payment processor is not yet complete. Dan Dolev, analyst at Nomura Instinet, writes in a new note that “a successful onboarding of the Eventbrite platform later in the year could help drive the much needed boost” to Square’s GPV (gross payment volume).

And as Buffett and others argue, the “mark to market” valuation of one company’s stake in another company is a fickle metric. That’s why Square also gives the figure for its net loss or profit each quarter minus the outlier gain or loss from Eventbrite.