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.
The six-year-old company’s shares gained US$4.07, or 45 percent, to close at US$13.07. The surge helped ease the pain of a mortifying markdown in Square’s initial public offering (IPO) price. The San Francisco company sold 25.7 million shares at US$9 apiece after money managers leery of Square’s unprofitable history refused to pay US$11 to US$13.
The concession appeared to attract bargain hunters betting that Square is worth the price that its management team had been demanding in the IPO. Even with Thursday’s rally, Square’s stock remains below the US$15.46 per share price that the company fetched a year ago when it raised US$180 million as a privately held start-up.
Most of the investors who participated in last year’s fundraising are to be issued additional shares to compensate them for the reduced IPO price.
Another technology company, Match Group Inc, the owner of dating sites and apps Match.com, OkCupid and Tinder, gained 23 percent to close at US$14.74 Thursday. It had priced its IPO at the low end of its anticipated range
Investors’ skittishness toward Square, known for its debit and card readers that plug into mobile devices, reflects uncertainty about the direction of the global economy as the US Federal Reserve prepares to raise short-term interest rates for the first time in nearly a decade, said James Gellert, chief executive officer of the research firm Rapid Ratings.
“Large, institutional investors taking a risk on technology want a discount now,” Gellert said. “There is a lot of concern about more market volatility in the year ahead.”
Square has been rapidly growing as millions of merchants have processed US$32.4 billion in credit and debit cards through its readers and terminals during the year ending Sept. 30.
The company’s cut from the payment processing fees generated revenue of US$893 million during the first nine months of this year, a 49 percent increase from the previous year.
However, Square has never turned a profit, accumulating losses totaling US$527 million since its inception.
Some investors are also worried about the distractions and demands facing Square’s co-founder and chief executive officer Jack Dorsey.
Besides running Square, Dorsey is serving as chief executive officer of Twitter at a time that the short messaging service is struggling to expand its audience and produce the first profit in its nine-year history.
Dorsey, who turned 39 Thursday, has most of his wealth tied up in Square. His stake in Square is worth US$930 million and his Twitter stake is to be worth about US$400 million after he turns over 6.8 million shares of his stock in that company to its employees.
The drop in Square’s market value over the last year could signal trouble ahead for other technology start-ups.
With interest rates hovering near zero, venture capitalists and other investors have been pouring tens of billions of US dollars into start-ups involved in transportation, data analysis, security, home rentals, finance and a wide assortment of other mostly mobile applications.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS