November 18, 2015 at 20:11Moment of truth: IPO Square will show if anyone else needs unicorns (IPO results added)
Recently, investors have praised the rapid growth in income of young private companies. One of these companies is about to test their favor.
On Wednesday evening, Square payment service will begin public offering. Square plans to sell the stock on Thursday morning at the New York Stock Exchange.
The head of Renaissance Capital LLC Caitlin Smith sees Square in two different guises: a fast-growing Internet company and a processing company with a lower multiplier and slower growth, writes Bloomberg.
In fact, Square receives 95% of its revenue from payment processing. The company offers a platform for receiving bank cards on mobile devices. Payment terminals compatible with smartphones on iOS and Android are used by street food merchants, taxi drivers and coffee shop owners. Square charges a 2.75% commission.
However, then it turns out that the company is actually limited to the product provided - a modification of the usual POS-terminals at which the innovativeness of the business ends.
After a series of placements of high-tech companies, investment funds began to cautiously assess the prospects of risky investments. Square Inc. is no exception here. Investors fear that the rush demand of small enterprises for the services of the company will quickly exhaust itself, and revenue will begin to decline sharply.
But Square is far from the first "unicorn" that plans to enter the IPO.
On April 15 this year, the Etsy service , which acts as an intermediary between the creators of copyright products and buyers of such things, held a public offering. The company issued 16.7 million shares at $ 16 apiece. Thus, the company's share price reached its maximum forecast figure, which was previously shown in the range of $ 14-16 per share. At that price, Etsy’s total value is $ 1.78 billion.
June 18, 2015 Fitbit postedtheir shares at $ 20, above the previously planned price. Initially, it was assumed that the manufacturer of fitness trackers will conduct an IPO in the range of $ 14–16 per share, but then the framework was increased to $ 17–19 per share.
As a result of the placement, Fitbit was able to raise $ 732 million, and the entire company was valued at $ 4.1 billion. At the same time, the manufacturer increased the number of shares distributed among investors from 34.5 million to 36.6 million. According to Dealogic, Fitbit IPO has become the third largest offering in the United States since the beginning of the year.
The shares of the Square payment service at the finish line before the IPO were estimated by experts at $ 11– $ 13. The company's capitalization is estimated at $ 4.2 billion. In the last round, Square securities cost $ 15.46 apiece. Megamind wrotethat in October Square was valued at $ 6 billion.
If the shares are sold at an IPO at a lower price limit, the company's valuation will be $ 3.6 billion.
Update :
According to the IPO, Square received a valuation of $ 2.9 billion. This is more than half the October estimate. The price per share fell below the minimum mark of $ 11 and amounted to $ 9. The company put up for sale $ 243 million of securities. This is 25% less than the declared amount ($ 324 million).
This situation puts some pressure on the founder and CEO of Square Jack Dorsey. Recently, he again became the CEO of Twitter and was going to combine these positions in two companies at once. But while the results of the work of both companies leave much to be desired.
On Wednesday evening, Square payment service will begin public offering. Square plans to sell the stock on Thursday morning at the New York Stock Exchange.
The head of Renaissance Capital LLC Caitlin Smith sees Square in two different guises: a fast-growing Internet company and a processing company with a lower multiplier and slower growth, writes Bloomberg.
In fact, Square receives 95% of its revenue from payment processing. The company offers a platform for receiving bank cards on mobile devices. Payment terminals compatible with smartphones on iOS and Android are used by street food merchants, taxi drivers and coffee shop owners. Square charges a 2.75% commission.
However, then it turns out that the company is actually limited to the product provided - a modification of the usual POS-terminals at which the innovativeness of the business ends.
After a series of placements of high-tech companies, investment funds began to cautiously assess the prospects of risky investments. Square Inc. is no exception here. Investors fear that the rush demand of small enterprises for the services of the company will quickly exhaust itself, and revenue will begin to decline sharply.
But Square is far from the first "unicorn" that plans to enter the IPO.
On April 15 this year, the Etsy service , which acts as an intermediary between the creators of copyright products and buyers of such things, held a public offering. The company issued 16.7 million shares at $ 16 apiece. Thus, the company's share price reached its maximum forecast figure, which was previously shown in the range of $ 14-16 per share. At that price, Etsy’s total value is $ 1.78 billion.
June 18, 2015 Fitbit postedtheir shares at $ 20, above the previously planned price. Initially, it was assumed that the manufacturer of fitness trackers will conduct an IPO in the range of $ 14–16 per share, but then the framework was increased to $ 17–19 per share.
As a result of the placement, Fitbit was able to raise $ 732 million, and the entire company was valued at $ 4.1 billion. At the same time, the manufacturer increased the number of shares distributed among investors from 34.5 million to 36.6 million. According to Dealogic, Fitbit IPO has become the third largest offering in the United States since the beginning of the year.
The shares of the Square payment service at the finish line before the IPO were estimated by experts at $ 11– $ 13. The company's capitalization is estimated at $ 4.2 billion. In the last round, Square securities cost $ 15.46 apiece. Megamind wrotethat in October Square was valued at $ 6 billion.
If the shares are sold at an IPO at a lower price limit, the company's valuation will be $ 3.6 billion.
Update :
According to the IPO, Square received a valuation of $ 2.9 billion. This is more than half the October estimate. The price per share fell below the minimum mark of $ 11 and amounted to $ 9. The company put up for sale $ 243 million of securities. This is 25% less than the declared amount ($ 324 million).
This situation puts some pressure on the founder and CEO of Square Jack Dorsey. Recently, he again became the CEO of Twitter and was going to combine these positions in two companies at once. But while the results of the work of both companies leave much to be desired.