Square sets stock price at $9, well below its price range
On the eve of its first day of trading, Square has set the price of its initial public offering at $9 a share, well under its $11 to $13 projected offering range.
A $9 share price values the San Francisco mobile payments company at $2.9 billion. Just one year ago, Square sold shares to private investors at $15.46 a share, valuing the company at $6 billion.
The lower price, announced late Wednesday, highlights the difficult position many tech companies are in: Despite private investor confidence, so-called unicorns -- or tech companies that in recent years have been valued at more than $1 billion despite producing little to no profits -- are largely untested in the public market.
And the shaky market has stirred fear among venture capitalists that companies such as Square won’t be as highly valued on Wall Street, as conservative investors seek to rein in the difference between share prices and earnings.
Square filed to go public in October in one of the year’s most-anticipated offerings and plans to sell 27 million shares.
Square was founded in 2009 by Twitter co-founder Jack Dorsey, who serves as chief executive of both companies.
Last year, Square’s losses jumped to $154 million on $850 million in revenue, from about $105 million on $552 million in revenue during 2013.
Square will be listed on the New York Stock Exchange under the ticker symbol “SQ,” with Goldman Sachs serving as lead underwriter.
Twitter: @byandreachang
