Square (Finally) Goes Public, Trading Well above Initial Pricing (Nov. 19. 2015)
After much prognostication regarding when Square would finally announce its IPO, the m-payments service provider began trading this morning on the New York Stock Exchange under the symbol SQ. The San Francisco-based company announced yesterday on its Website the pricing of its IPO of 27 million shares of its Class A common stock at a public offering price of $9 per share, well below the initial expectations of $11-$13 as detailed in a preliminary SEC filing. More than 22.6 million shares are being offered by Square, and 1.35 shares are being offered by the Start Small Foundation, a charitable fund created by Jack Dorsey, Square’s CEO and co-founder.
Rumors and reports that the company was ready to go public had been circling around the company for approximately two years and, in July, the company filed confidentially with the SEC. Finally, in mid-October the mystery finally ended when Square announced it filed with the SEC regarding a proposed IPO of its Class A common stock.
“They set the price at $9 a share, which would be disappointing. But the stock is up and is trading at about $13.41 [as of this morning] so [Square has] to be enthused about that,” says Larry Berlin, vice president, research and venture capital, First Analysis. “Trading at this level is par for the course. This is what normally happens with an IPO, where the stock price often appreciates a good amount, at least at the beginning.”
However, not everyone is as bullish about the company.
“Square is a company that’s a good story but is grossly overvalued,” Eric Grover, consultant, Minden, Nev.-based Intrepid Ventures, tells Pay News. “Square is basically a company that has sold itself as being a disruptor, something other than a payments company that enables small companies to accept credit cards.”