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Square files for keenly awaited stock market debut
[SAN FRANCISCO] Digital payments startup Square, founded by Twitter chief Jack Dorsey, announced on Wednesday that it has filed with for a stock market offering to raise US$275 million.
The exact date Square will go public was not revealed, but the San Francisco-based company planned to trade on the New York Stock Exchange under the symbol "SQ." "We've built one of the fairest and most efficient payments businesses in the world," Mr Dorsey said in a letter included with paperwork filed with the Securities and Exchange Commission.
"Creating more inclusion and greater equality in the global economy is both a social need and a huge business opportunity." Square started out in 2009 by providing financial transactions software for smartphones or tablets along with free "dongles" that plug into devices for reading magnetic strips on payment cards.
Mr Dorsey said that inspiration for the startup sprang from frustration experience by an artist friend who was unable to accept credit card payments for creations.
Square recorded a loss of US$77.6 million in the first half of this year as compared with a loss of US$79.35 during the same period in 2014, according to the filing.
Revenue for the first six months of this year at Square was US$560.6 million as compared with US$371.9 million in revenue taken in during the same period last year.
Square warned in the filing that the rate of revenue growth was expected to drop for reasons including that major client Starbucks will switch to a rival payment system in the coming year.
"Our sellers and other users of our services have no obligation to continue to use our services, and we cannot assure you that they will," Square said in the filing.
Potential investors in the initial public offering (IPO) will have to decide whether they want to put their money into a company with a part-time chief.
STEERING TWO SHIPS
Early this month, Mr Dorsey made his job as interim chief at Twitter permanent, giving him the task of steering two major companies in the online sector.
Twitter is betting that the second coming of co-founder Dorsey as chief executive will bring blockbuster growth that has eluded its grasp and disappointed investors.
The soft-spoken Dorsey, who will turn 39 next month, ran Twitter in 2007-2008 and served as interim chief executive after Dick Costolo resigned in June, brings the messaging company full circle.
Media reports said Square took advantage of a US law to file for its IPO on a confidential basis earlier this year. The law allows firms with less than US$1 billion in revenue to put off disclosure of financial data until 21 days before the "roadshow" for investors.
In addition to the US, Square has operations in Canada, Japan and Australia and claims to have "millions" of users around the world ranging from independent craftsmen who use its dongle to accept credit card payments to large chain stores.