ICP Square

Square, the payment technology business created by Twitter CEO Jack Dorsey and headed by him, raised $ 243 million today evening by pricing its initial public offering at $ 9 per share,Ingerson Capital Partners reveal this implies a market value of $ 2.9 billion.


“It's a massive setback for the San Francisco-based corporation, which had hoped to sell its 27 million shares for between $ 11 and $ 13. The same may be said for some of its later investors, valued at approximately $ 6 billion, albeit many of them. will receive additional stock due to the low price. ”Matthew Price, Ingerson Capital Partners Head of Capital Markets said about the IPO.


Square is anticipated to debut on the New York Stock Exchange with the ticker symbol "SQ" tomorrow morning. Following Box (BOX) and Pure Storage, Square becomes the third software startup to go public in 2015 after being valued at $ 1 billion or more by private market investors (PSTG). The IPO, one of the most carefully followed this year, was led by Goldman Sachs (GS).


Square's current investors did not sell stock in the IPO, which only represented 8% of the company's outstanding shares.


In a multi-stage Series E round that lasted from September 2014 through just last month, Square raised $ 180 million in private capital at $ 15.46 per share. Square was valued at $ 11.01 a share in its most recent Series D round, submitted in September 2012. Holders of Series E stock will receive additional shares in the IPO to help compensate for the low price.


Square's IPO comes when the company's losses appear to be increasing, and revenue growth looks to be decreasing. Square reported a $ 77.6 million loss for the first six months of this year in its original S-1 filing with the SEC, compared to a $ 79 million. loss in the same period last year. During the same six months, revenue increased to $ 560.5 million from $ 372 million.


Ingerson Capital Partners analysis reveals that Square reported a loss of $ 53.9 million on $ 332.2 million in revenue in its most recent third-quarter filing, indicating slower revenue growth and broader losses than previously.


Investors may be concerned about Dorsey's dual duties as CEO of Square and Twitter, which has resulted in a drop in the stock price. Despite being a full-time CEO at Twitter, Square revised its S-1 filing earlier this week to add wording about Dorsey committing his "full business efforts and time" to the company.


Square's IPO comes as a growing number of mutual funds, such as Fidelity and T. Rowe Price, are lowering the value of their shares in privately owned digital companies. The write-downs indicate that investment firms believe startups like Zenefits, Snapchat, and DraftKings, which make human resources software, have lost value.