Square (SQ) IPO Opens Up 24% at $11.20/Share

Square (NYSE: SQ) IPO opens at $11.20 per share after pricing 27 million shares at $9 apiece, which was below the expected $11-$13 price range.

A total of 27,000,000 shares were offered; 25,650,000 of the shares are being offered by Square, and 1,350,000 shares are being offered by the Start Small Foundation, a donor-­advised fund held and administered by the Silicon Valley Community Foundation, the selling stockholder. The Start Small Foundation is a charitable fund created by Square's CEO and founder, Jack Dorsey.

Square has granted the underwriters a 30-­day option to purchase up to an additional 4,050,000 shares of Class A common stock from the company. Giving effect to the offering, there are 355 million diluted shares outstanding using the treasury stock method.

Goldman, Sachs & Co., Morgan Stanley, and J.P. Morgan​ are acting as lead joint book-running managers for the offering. Barclays, Deutsche Bank Securities, Jefferies, RBC Capital Markets, and Stifel are acting as additional book-­running managers for the offering, and LOYAL3 Securities, Inc. and SMBC Nikko are acting as co­-managers.

With the company's initial SEC registration, it commented, "For the six months ended June 30, 2015, our total net revenue grew to $560.6 million, up 51% from the six months ended June 30, 2014. In 2014, our total net revenue grew to $850.2 million, up 54% from the prior year. For the six months ended June 30, 2015, our Adjusted Revenue grew to $198.8 million, up 67% from the six months ended June 30, 2014. In 2014, our Adjusted Revenue grew to $276.3 million, up 73% from the prior year. Adjusted Revenue is a non-GAAP financial measure that we define as our total net revenue less transaction costs, adjusted to eliminate the effect of activity under our payment processing agreement with Starbucks. In the third quarter of 2012, we signed an agreement to process credit and debit card payment transactions for all Starbucks-owned stores in the United States. The agreement was amended in August 2015 to eliminate the exclusivity provision in order to permit Starbucks to begin transitioning to another payment processor starting October 1, 2015. Under the amendment, Starbucks also agreed to pay increased processing rates to us for as long as they continue to process transactions with us. We anticipate that Starbucks will transition to another payment processor and will cease using our payment processing services prior to the scheduled expiration of the agreement in the third quarter of 2016, and, in any event, we do not intend to renew it when it expires."

Square is a payments processor and POS system provider.

You May Also Be Interested In

• Fisker (FSR) files form 10-K, sees more job cuts, reiterates going concern doubts
• Orgenesis (ORGS) Files $100M Mixed Shelf
• Cyngn Inc (CYN) Announces Pricing of $5.0 Million Firm Commitment Public Offering of Common Stock