Square drops ballast before IPO: Wall Street auditors rated the company 30% lower than in October
The shares of the Square payment service at the finish line before the IPO were estimated by experts at $ 11– $ 13. This will be the price range of shares on the New York Stock Exchange. The company's capitalization is estimated at $ 4.2 billion. The company itself is selling 25.65 million shares. Another 1.35 million securities intend to implement the Start Small Foundation, a charity foundation founded by Jack Dorsey. In the event of increased demand for securities, Square will sell another 4.05 million shares. The company expects to attract over $ 403.7 million.
Square, founded by Jack Dorsey, creator of Twitter , raised $ 590 million from venture investors, including Goldman Sachs and Rizvi Traverse Management . Megamind wrotethat in October, experts estimated Square at $ 6 billion. Despite the fact that the estimate was higher then, the company planned to attract a smaller amount - about $ 275 million.
Source: eugenyshultz.livejournal.com
“Square was growing quite well, and at an earlier stage, the high score was justified,” said Sergey Azatyan , co-founder and managing partner of Inventure Partners Venture Fund . According to him, about a third of technology companies during the last private round receive higher ratings than with an IPO. “Investors in the last rounds have different mechanisms to protect their investments, and if the IPO takes place at a lower price, they, in fact, will be charged extra shares, ” Mr. Azatyan explained to Kommersant.
Judging by the statements of experts, a decrease in the assessment will not negatively affect the affairs of Square and its investors, and may even be beneficial. In any case, the company's appetites are growing: it plans to sell more shares and attract an amount that is almost 1.5 times higher than originally announced.
Square plans to direct part of the funds received to replenish working capital, and also uses them for corporate purposes. In addition, part of the money can go to buy “complementary” businesses, technologies and services.
Square offers a platform for accepting bank cards on mobile devices. Payment terminals suitable for smartphones on iOS and Android are used by street food merchants, taxi drivers and coffee shop owners.
About Square plans to enter the IPO became knownin July 2015. The company took advantage of the US law on support for startups - according to this law, a company with an annual income of up to $ 1 billion may not disclose details of its work to the IPO. Among the 10 underwriters of this offering are Goldman Sachs , Morgan Stanley and JP Morgan Securities .
Square is 24.4% owned by Jack Dorsey. He is currently the CEO of both Square and Twitter, and after the initial public offering of Square, he will become the head of two public companies. For Square, this is a risk, since Dorsey will be forced to sacrifice time in favor of either of the two companies.
Following the nine months ended September 30, 2015, Square's total net revenue was $ 893 million, 49% higher than the same period last year. Gross income for the same period increased by 65.4%, to $ 261 million. Square's net loss was $ 131.5 million, an increase of 12%.