Square priced its IPO at $9 a share, valuing it at $2.66 billion.
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“If Square is a big success, there’s not necessarily going to be a flood – but a big increase in companies tapping the public markets for further financing”, he continued.
The payment processor’s IPO raised US$243 million after the company’s shares were priced at US$9 each.
It is expected that shares of the company will start trading on Thursday on the New York Stock Exchange under the symbol ‘SQ.’ and the offering is expected to close on November 24.
Investors also wonder how much time Dorsey will be able to devote to Square as he tries to boost Twitter’s user growth. At the current price, Square is valued around $3.5 billion.
With its issue price spurring fears about the future of tech unicorns, Square Inc. found a bloom of hope Thursday morning.
Payments “unicorn” square will debut on the public markets at a deep discount to the nosebleed value private investors put on the tech company. Shares of Square jumped $4.07 to $13.07 – taking Dorsey’s stake in the company to $910 million. The theory is that many of those companies will stumble when they’re forced to move past the hype and have to become profitable, publicly traded businesses. Some analysts have speculated that he will be quick to pass the reins over to a fresh pair of hands at Square, leaving him free to concentrate on turning Twitter into a profitable business.
Square generates 95% of its revenue from retailers, restaurants and other shops that pay the company a fee to process payments. It showed similar total net revenue in 2014, as well, taking in $850.2 million, up 54 percent from the previous year ($552 million).
“We have a long term view of our business and where we need to go and what we need to do”, Dorsey said, adding that Square plans to continue investing in the company and accelerating its ability to scale. The first-day share rise saved face for Dorsey, who has come under intense pressure from investors who are skeptical that he can run both companies, especially as Twitter struggles to find new users. For the first six months of 2015, revenues were $560.6 million, net loss was $77.6 million, and gross profit was $164 million.
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The IPO is among the strongest indications yet that valuations set by private market investors can be fleeting.
