Square Files for IPO

CEO's ability to devote time to the company cited as risk factor in S-1 filing.
Katie Kuehner-HebertOctober 15, 2015

As expected, Square on Thursday announced the filing of its initial public offering, explaining why it plans to continue losing money in the short term while investing for long-term growth.

The San Francisco-based mobile payment processor said in its S-1 filing with the Securities and Exchange Commission that it was pushing to grow in foreign countries, particularly in Canada and Japan. Square also continues to make investments in new technologies, including credit and debit card readers that accept EMV-enabled cards and near field communication, which enables payments via phone apps Apple Pay and Android Pay.

“We intend to continue to make investments that will serve sellers and buyers over the long term even if a return on these investments is not realized in the short term,” the company wrote.

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During the first half of 2015, Square had revenue of $560.6 million and a loss of $77.6 million, compared with $371.9 million in revenue and $79.4 million in losses for the first half of 2014.

The company is valued by private investors at $6 billion. It plans to list its common stock on the New York Stock Exchangenunder the ticker symbol “SQ.”

Square’s financials are better than what many at the TechCrunch industry publication had expected.

“That said, the company is attempting to enter the public markets at an interesting time,” TechCrunch wrote. “Recent IPOs, including the tectonic Alibaba and the popular Box, have seen their share prices struggle.”

The other challenge Square faces is having a CEO, Jack Dorsey, who is also now CEO of Twitter. Dorsey owns nearly 25% of Square, according to the filing.

TechCrunch added that “the most interesting” risk factor listed in Square’s filing is the fact that Dorsey will essentially have to split his time between the two companies.

“This may at times adversely affect his ability to devote time, attention, and effort to Square,” the company wrote.

Data is curated by findthecompany.com and sourced from VentureDeal.