Moment of truth: Square IPO will show whether someone else needs "unicorns" (IPO results are added)
Recently, investors have praised the rapid growth in income of young private companies. One of these companies is about to check their favor.
On Wednesday evening, Square payment service will begin public offering. In Square it is planned that the shares will be sold on Thursday morning on the New York Stock Exchange.
The head of Renaissance Capital LLC, Caitlin Smith, sees Square in two different guises: a fast-growing Internet company and a processing company with a lower multiplier and slower growth, Bloomberg writes .
')
In fact, Square receives 95% of the revenue from payment processing. The company offers a platform for receiving bank cards on mobile devices. Payment terminals compatible with smartphones on iOS and Android are used by street food vendors, taxi drivers and coffee shop owners. Square takes a commission of 2.75%.
However, then it turns out that the company is actually limited by the product provided - a modification of the usual POS-terminals, on which the innovation of the business ends.
After a series of placements by high-tech companies, investment funds began to be wary about the prospects for risky investments. Square Inc. is no exception here. Investors fear that the feverish demand of small businesses for the company's services will quickly exhaust itself, and revenue will begin to decline sharply.
But Square is not the first “unicorn” that plans to enter the IPO.
On April 15 of this year, the Etsy service, which acts as an intermediary between the creators of copyright products and buyers of such things, held a public offering. The company issued 16.7 million shares at $ 16 apiece. Thus, the value of the company's shares reached the maximum forecast figure, which was previously shown in the range of 14-16 dollars per share. At this share price, the total value of Etsy is $ 1.78 billion.
June 18, 2015 Fitbit placed its shares at $ 20, higher than the previously planned price. Initially it was assumed that the manufacturer of fitness trackers would hold an IPO in the range of $ 14–16 per share, but then the framework was raised to $ 17–19 per share.
As a result of the placement, Fitbit was able to raise $ 732 million, and the entire company was valued at $ 4.1 billion. At the same time, the manufacturer increased the number of shares distributed among investors from 34.5 million to 36.6 million. According to Dealogic, the Fitbit IPO has become the third largest placement in the United States since the beginning of the year.
Shares of Square payment service at the finish line before the IPO, experts estimated at $ 11– $ 13. The company's capitalization is estimated at $ 4.2 billion. In the last round, Square's securities were priced at $ 15.46 per share. "Megamind" wrote that in October Square was estimated at $ 6 billion.
If the IPO shares will be sold at a lower price boundary, the company's valuation will be $ 3.6 billion.
Update :
According to the IPO, Square received a valuation of $ 2.9 billion. This is more than two times less than the October estimate. The price per share fell below the minimum of $ 11 and amounted to $ 9. The company put up for sale $ 243 million in securities. This is 25% less than the stated amount ($ 324 million).
The current situation exerts certain pressure on the founder and CEO of Square, Jack Dorsey. Recently, he again became CEO of Twitter and was going to combine these positions in two companies at once. But while the results of the work of both companies leave much to be desired.
On Wednesday evening, Square payment service will begin public offering. In Square it is planned that the shares will be sold on Thursday morning on the New York Stock Exchange.
The head of Renaissance Capital LLC, Caitlin Smith, sees Square in two different guises: a fast-growing Internet company and a processing company with a lower multiplier and slower growth, Bloomberg writes .
')
In fact, Square receives 95% of the revenue from payment processing. The company offers a platform for receiving bank cards on mobile devices. Payment terminals compatible with smartphones on iOS and Android are used by street food vendors, taxi drivers and coffee shop owners. Square takes a commission of 2.75%.
However, then it turns out that the company is actually limited by the product provided - a modification of the usual POS-terminals, on which the innovation of the business ends.
After a series of placements by high-tech companies, investment funds began to be wary about the prospects for risky investments. Square Inc. is no exception here. Investors fear that the feverish demand of small businesses for the company's services will quickly exhaust itself, and revenue will begin to decline sharply.
But Square is not the first “unicorn” that plans to enter the IPO.
On April 15 of this year, the Etsy service, which acts as an intermediary between the creators of copyright products and buyers of such things, held a public offering. The company issued 16.7 million shares at $ 16 apiece. Thus, the value of the company's shares reached the maximum forecast figure, which was previously shown in the range of 14-16 dollars per share. At this share price, the total value of Etsy is $ 1.78 billion.
June 18, 2015 Fitbit placed its shares at $ 20, higher than the previously planned price. Initially it was assumed that the manufacturer of fitness trackers would hold an IPO in the range of $ 14–16 per share, but then the framework was raised to $ 17–19 per share.
As a result of the placement, Fitbit was able to raise $ 732 million, and the entire company was valued at $ 4.1 billion. At the same time, the manufacturer increased the number of shares distributed among investors from 34.5 million to 36.6 million. According to Dealogic, the Fitbit IPO has become the third largest placement in the United States since the beginning of the year.
Shares of Square payment service at the finish line before the IPO, experts estimated at $ 11– $ 13. The company's capitalization is estimated at $ 4.2 billion. In the last round, Square's securities were priced at $ 15.46 per share. "Megamind" wrote that in October Square was estimated at $ 6 billion.
If the IPO shares will be sold at a lower price boundary, the company's valuation will be $ 3.6 billion.
Update :
According to the IPO, Square received a valuation of $ 2.9 billion. This is more than two times less than the October estimate. The price per share fell below the minimum of $ 11 and amounted to $ 9. The company put up for sale $ 243 million in securities. This is 25% less than the stated amount ($ 324 million).
The current situation exerts certain pressure on the founder and CEO of Square, Jack Dorsey. Recently, he again became CEO of Twitter and was going to combine these positions in two companies at once. But while the results of the work of both companies leave much to be desired.
Source: https://habr.com/ru/post/296482/
All Articles