$277M birthday gift? Square’s Dorsey got one

“The collective power of our millions of sellers sustains a scale from which we can build valuable financial services and marketing services, creating reinforcing and virtuous cycles back to our core business of payments”, the company said, signaling an intent to leverage all that consumer data more than it has in the past. “This is what can accelerate us as a business”.

The unusual decision to price its shares at a level below the that of its most recent private funding round effectively halved the valuation of the company from $6bn in October a year ago, when it sold shares at $15.50, to less than $3bn.

A few tech industry luminaries have warned we’re in the middle of another tech bubble, arguing that numerous unicorns – or private companies valued over $1 billion – we see today are proof of inflated valuations.

Square’s IPO is one of the highest profile offerings in this months, and the result is further evidence that public investors are become more skeptical of that venture capitalists are putting huge valuations on private technology companies.

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.

A disappointing opening in contrast would lead to questions over private-funding valuations and the state of the public market. Match Group, the owner of a number of dating sites including Tinder, also priced shares in its offering on Wednesday.

With its market debut, chief executive Jack Dorsey had a lot to celebrate Thursday. The company is not the only one that priced its IPO below the expected range this year.

The debut comes at a time when slowing global growth and uncertainty about the timing of a USA interest rate hike have kept investors on edge.

“Now is the time, because you have a big platform shift in payments happening in the United States and we wanted to get that message out”, said Square CFO Sarah Friar in an interview with this newspaper.

The company said in the filing to the SEC that Starbucks has announced that it will transition to another payment processor and will cease using Square’s payment processing services altogether before the scheduled expiration of the agreement in the third quarter of 2016.

As of 11:01am Eastern, the stock was trading at $13.60 per share, up 51 percent from its IPO price.

Square was founded in 2009 after co-founder Jim McKelvey, an artist, realized how hard it was for small businesses to accept card payments when he could not do so at an art show.