Square Surges in First-Day Trading; Match to Debut Soon

Square bounced back in its stock market debut Thursday after the once-hot mobile payments service slashed the price of its initial public offering to get the deal done.

Mobile payment company Square slashed its share price on Wednesday night ahead of a sale that is casting a shadow over the new darlings of the tech sector. 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 past year in a private funding round.

The weaker price has put the market capitalization of Square at just over $2.9 billion, which is a long way from the valuation of $6 billion it earned from its private investors. But he also faces serious skepticism from analysts casting a wary eye at Square’s core business, and its promises to revolutionize the way companies accept payments. “And the reality is not that”.

“The public market has basically puked up private valuations for a year”, Max Wolff, chief economist at Manhattan Venture Partners, said, citing Etsy Inc. That came as a surprise to many longtime company observers, some of whom had already commented that the original range seemed low.

Square says that it will use proceeds from the IPO for general corporate purposes.

The IPO from six-year-old Square, founded and run by Twitter Inc.

Square started in 2009 and offers free software app and a small card reader you can plug into your phone or tablet.

But the two tech companies were also valued well below what private investors have priced them at with these public listings.

Square sold 27 million shares in the IPO, raising $243 million in the offering.

Shares of the operator of Tinder and other dating products are expected to start trading Thursday on the NASDAQ Global Select Stock Market.

Tech companies Square and Match surged in their first day of trade on Wall Street yesterday. With competition from the likes of Google, PayPal, Visa Inc. “These are formidable competitors”.

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.

Net income was -$131.5 million, marking a year-over-year decline from -$117.0 million.