Square IPO to raise as much as Dollars 400 mln

San Francisco-based Square, which is headed by Twitter Inc Chief Executive Jack Dorsey, is one of the most prominent “unicorns”, or private companies valued at more than US$1 billion, to make a public debut this year.

“This is very much an acknowledgement that “the public will pay more” regardless of the private market valuation was both magical and misguided thinking”, says Lise Buyer, an analyst with Class V Group, who helped plan Google’s IPO.

Erlich (T. J. Miller) and Jian Yang (Jimmy O. Yang) in the show ‘Silicon Valley, ‘ which has popularized the startup world. According to CB Insights, there are 143 unicorns worldwide with a combined valuation of $508 billion.

“Others have been hesitant to go public”, said Smith. This is fueling concerns that there’s a wide – and expanding – gulf between between how private investors and public markets value companies. “It will still be priced at premium to companies that are similar”, he said. As companies start to go public later, the opposite is now true. As per the firm’s S1 filing with the SEC, the CEO’s ability to divide his efforts, time, and attention between the two entities will adversely affect the company’s progress. Last year, Square reported total revenue of $850.2 million, up 54 percent annually. Now the market value is about $3.35 billion. The mobile payments company is valued around $4.19 billion, even though previous rounds placed it at the $6 billion mark.

Meanwhile Etsy Inc.’s shares are languishing about 40 percent lower than the $16 IPO price in April.

Square, which processes credit card payments for millions of small businesses, increased its revenue nearly 50% in the first nine months of this year to $893 million and posted a net loss of $132 million.

The IPO pricing is disappointing for Square, but the company’s growing fast, and it managed to extricate itself from a awful deal with Starbucks that cost it about $70 million over the last three years. “Square is a company that does have its upsides, but the downside is it’s not making money”, Miller said. Jason Lemkin, managing partner at Storm Ventures, said the valuation is healthy and that people are overreacting.