Square Jumps More Than 60 Percent in Early Trading The mobile payments company made its market debut today.
By Reuters •
This story originally appeared on Reuters
Shares of Square Inc, the mobile payments company co-founded and still run by Twitter Inc Chief Executive Jack Dorsey, rose as much as 64 percent in their market debut on Thursday, offering some hope to startups hoping to go public.
Square's shares touched a high of $14.78 in early trading, valuing the company at $4.77 billion.
The stellar debut could presage a strong opening for online dating company Match Group Inc, which debuts later in the day.
Square's IPO raised $243 million after the company's shares were priced at $9 each.
The debut comes at a time when slowing global growth and uncertainty about the timing of a U.S. interest rate hike have kept investors on edge.
As of Wednesday, 35 of 144 U.S. IPOs this year had to be priced below the expected range.
Competition is also intensifying in the mobile payments market, with Apple Inc launching its Apple Pay service, Amazon.com Inc exploring in-store payments, and start-ups such as Stripe Inc entering the fray.
While the stock popped at the opening, they had priced well below the expected range of $11-$13.
"Two years ago, when the IPO market was hot, they might have been able to coast on their buzz and 'cool' factor alone, but the environment is different right now," Brian Hamilton, chairman of data firm Sageworks, said earlier this week.
Square's losses mounted in the first nine months of the year as the company invests heavily in its products.
The company reported a net loss of $131.5 million in the period, after a loss of $117 million a year earlier, but revenue rose 49 percent to $892.8 million.
Investors also wonder how much time Dorsey will be able to devote to Square as he tries to boost Twitter's user growth.
San Francisco-based Square sold 25.7 million class A common shares in the offering, while Start Small Foundation, a charitable fund created by Dorsey, sold about 1.35 million.
Dorsey owns 21.9 percent of Square following the IPO and is the company's biggest shareholder.
(Reporting by Rachel Chitra; Editing by Kirti Pandey and Ted Kerr)
