Square discounts stock to $9 a share to complete IPO

Andrew Poole

05:51 | Thursday, Nov 19, 2015

That price range was already a drop from the valuation investors gave Square during its most recent private round of financing, when Square raised $150 million at $15.50 per share, or at a valuation of $6 billion, in October 2014. The price could rise or fall by the time the stock becomes available to mainstream investors on the NY Stock Exchange on Thursday morning. It is one of a number of so-called "unicorns" - start-up companies valued at billions of dollars that have yet to make a profit.

Square, which started off as a simple card reader that plugged into a speaker adaptor, spent years trying to differentiate itself as a hip consumer brand as much as it was a point of sales service for small- to medium-sized businesses. Square's pricing - below its previous valuation - is one of many instances of valuations being written down among late-stage startups.

Still, valuations in public markets are not perfectly comparable to private ones.

"They are competing with Visa and American Express and PayPal, and more and more with Apple and Google", said James Gellert, CEO of Rapid Ratings, which rates the financial health of companies. "These are formidable competitors".

Square reported mounting losses for the first nine months of the year, compared with the same period in 2014, and slowing revenue growth.

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