Mobile payments company Square rises in market debut

Mobile payments company Square debuted on the NY Stock Exchange this morning (ticker symbol SQ), trading at $11.20 per share, a 24 percent pop above the $9 price set by the company yesterday.

The IPO price puts the San Francisco, California-based company’s market valuation at about $2.9 billion, excluding options. He went through a setback the day before the IPO, when shares were priced at $9, well below their proposed range of $11 – 13; and even further lower than the $15.46 price which investors paid previous year in a private funding round. Dorsey got the inspiration for his second company-he was one of the three co-founders of Twitter back in 2006-when his friend Jim McKelvey had trouble completing a $2,000 sale of his glass products because he could not process credit cards; McKelvey is the other co-founder of Square.

Nonetheless, the reduction on its private valuation means late-stage private investors who were guaranteed a return were granted extra shares, diluting the stakes of earlier investors and employees.

But, while things look good now, there’s no mistaking that Square’s IPO came perilously close to falling flat.

At that time, it raised $US150 million at $US15.50 per share.

The company Match Group, which owns online dating services like Match.com and Tinder, also raised less than it expected for its IPO.

“Square’s financials leave much to be desired”.

“Those particular types of companies – these unicorns that have these insane valuations – you are going to see a few of them become more conservative in their pricing because it makes sense”.

“It seems more like another payment processor that uses a little technology than a technology company”. Its original Square Reader made credit card transaction simple, by offering a strip reader that attaches to mobile devices and plugs into headphone jacks.

Two members of tech’s $1-billion club saw their shares climb after their stock market debuts Thursday amid growing concern about the lofty valuations of Silicon Valley’s hottest start-ups.

During the first nine months of this year, square recorded a loss of $131.5 million, and a 49% increase in revenue to $892.8 million.

It has been a hard time for tech flotations globally, with French music streaming company Deezer and Caribbean telecoms firm Digicel both pulling their listing plans in the past six weeks.

Last month, Square disclosed that its quarterly losses are mounting, while its sales growth slows.

The company will sell 25.65 million Class A common shares, while the Start Small Foundation, a charity created by Dorsey, will offer 1.35 million.