Web: Square Jumps in Market Debut, Offering Hope to Startups

November 2015 by: From The Web

Shares of Square Inc, the mobile payments company co-founded and still run by Twitter Inc Chief Executive Jack Dorsey, soared as much as 64 percent in their market debut, following a marked-down initial public offering, countering the negative sentiment that has nagged at Silicon Valley startups in recent weeks.

The steeply discounted IPO price, at less than 60 percent of the company's last private valuation, had raised questions about the prospects of other so-called 'unicorns' - startups worth at least $1 billion - that might want or need to go public.

A number of tech IPOs have performed poorly over the past year, and mutual fund investors including Fidelity Investments have been marking down the value of their private tech holdings.

Dispelling some of the gloom, Square's shares jumped to a high of $14.78 in early trading on Thursday and closed at $13.07, booking a 45 percent gain.

The stock pop came after the IPO priced at $9 late on Wednesday, well below the expected range of $11 to $13 and even farther below the $15.46 price of Square's last private financing in 2014. It bucked a difficult stretch for IPOs, which are trading down about 5 percent for the year.

Investors wary of Square's valuation likely waited until the shares landed on the public market to buy, analysts said, and the weak price set on Wednesday created a pile-on Thursday morning that drove the stock higher.


Continue Reading: Reuters