Square Inc. (NASDAQ:SQ) surged over 60% after lackluster IPO pricing.
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At one point, Square reached a high for the day of $14.78 but retreated from that peak level. I wouldn’t be surprised if the Square IPO timing wasn’t a way back into a smooth takeover. But, he said, “we’ll see how the medium- to long-run looks”. “The time felt right, the momentum felt right”.
“It’s all about accelerating the business now, our tools and our features”.
Match Group, the new firm which operates dating apps Tinder and OK Cupid, also scored well in its first date on Wall Street as the market warmed to its stock offering.
On Wednesday, the company priced its IPO below its expected range of $11 to $13. In addition the drops in price per share, it has reported $131.5 million in losses, a significant rise from the $117 million reported in losses previous year. The debut will poses another test of investors’ willingness to risk their money on a small company such as Square, which is trying to topple better-established rivals in the financial services industry.
Analysts also obseve that Square’s situation reflects a tough IPO market for tech companies in 2015. The original price valued the company at around $3 billion.
Other recent tech IPOs such as Box, and GoPro have struggled to maintain momentum after their debuts. The $9 per share IPO was a further conservative turn. It’s a reasonable question – Square’s business is around payments and credit card transactions, but it makes it own hardware, provides small business loans and other small business services, and has even gotten into restaurant delivery. “We’ll measure ourselves by our commitment to take the long view and focus on building a company that creates value over decades and not just a few fiscal quarters out”.
But Friar notes that all of Square’s products go hand-in-hand and the company’s payments data gives it an edge over its competitors.
It could also be an indication that investors are not particularly happy about Square CEO Jack Dorsey running two public companies, as he’s also CEO of Twitter.
Square offered its stock for $9 per share, below its planned range of $11 to 13 per share.
For the nine months ended September 20, Square made $892.8 million in revenue, a 49 percent increase from the same period in 2014, but slower revenue growth compared with prior years. To them it’s like: Facebook has done it, why can’t these companies do.
And Match set its initial price at $12, which was on the low end of the company’s original expectations.
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Investors’ skittishness toward Square, known for its debit and card readers that plug into mobile devices, reflects uncertainty about the direction of the global economy as the Federal Reserve Bank prepares to raise short-term interest rates for the first time in almost a decade, said James Gellert, CEO of the research firm Rapid Ratings.
