Square, the payments startup that Dorsey founded in 2009 after leaving Twitter, filed paperwork with the Securities and Exchange Commission on Wednesday to raise up to $275 million in a public offering, though that amount will likely increase.
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As for stock-based compensation, Square disclosed that as of June 30, there was $178.6 million of total unrecognized compensation cost related to outstanding stock options and restricted stock awards that is expected to be recognized over a weighted average period of 3.51 years.
Square’s net revenue is growing – from $552 million in 2013 to $850 million in 2014, and $561 million in the first half of 2015. The company plans to trade on the New York Stock Exchange under the symbol SQ.
Jack Dorsey is the chief executive officer of Square and was recently named the CEO of Twitter as well.
Dorsey said that inspiration for the startup sprang from frustration experience by an artist friend who was unable to accept credit card payments for creations.
Starbucks Corp. has been a prominent venue for Square, which has a line in its financial statements singling out Starbucks transaction revenue, a figure totaling $123 million previous year. This isn’t exactly a shocker, but here’s the breakdown of Square’s gross payment volume. Now that Dorsey is running two companies, a few have wondered whether investors might find Square’s IPO less appealing.
Dorsey has since found himself not only back as Twitter as executive chairman but subsequently as interim CEO this summer and then permanent CEO of both Twitter and Square just last week. The company also makes the Square Stand, which converts an iPad into a point-of-sale system. “This may at times adversely affect his ability to devote time, attention, and effort to Square”, the document states.
The payments company Square is preparing for the most important event in its young life without the undivided attention of its CEO.
The good news is that while the Square IPO filing shows (unsurprisingly) a company operating in the red, the growth rate is pretty impressive.
The company was founded by a team led by Jack Dorsey, who is CEO.
However, Square warns in the risk factors section of the filing that it anticipates Starbucks will transition to another payment processor and will cease using its payment processing services prior to the scheduled expiration of their processing agreement next year.
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Dorsey didn’t address or even mention Twitter in his note in the S-1, instead focusing on Square’s role in the financial industry.
