Jack Dorsey, the CEO of Square, Inc and the now CEO of Twitter, has a busy month ahead of him.
Jack's second company, Square, Inc, a mobile payment company based in San Francisco, has filed for an IPO and will be listed under ticker symbol "SQ". The company is holding its roadshow this week and likely decide upon a stock price by the end of it.
According to CNBC, Square, Inc plans to trade as a public company by the week before Thanksgiving.
The company's private-market valuation, according to its last funding round in 2014, is $6 billion.
While that is all good, Square's filings show that the company is still in the red. For the first six months of 2015, Square reported a loss of $77.6 million on a revenue of $560.5 million. Moreover, according to Square's latest third-quarter filings, the company posted a net loss of $53.9 million on a revenue of $332.2 million in revenue. The company, in all, owes debts north of $350 million.
Therefore, it is to no surprise that Rapid Ratings, an organization which rates the financial health of private and public companies, has a dismal 41 out of 100 rating for Square.
The company, nonetheless, hopes to raise about $275 million in capital through the IPO. However, that number is likely to change given that the figure was mainly used for the purposes of calculating registration fees.
Problems for Square
The interesting thing about Square's IPO is that they are debuting at a time when investors are "shying away from IPOs after stocks plunged in August amid worries about China's economy and uncertainly about the timing of an increase in U.S. interest rates" – Reuters.
Moreover, another issue, which Square happened to disclose in its filings, is that Jack serving as the CEO of two public companies, Twitter and Square, may adversely affect his ability to steer Square to greater success. This is especially concerning given that Twitter, in itself, is not faring too well.
Then there is also the issue of profitability and scalability. As highlighted before, Square is still facing losses. Moreover, given the increased competition from competitors such as Apple Pay, Pay Pal, and many others, Square's market arena is surely crowded.
So fellow monkeys, what do you guys think about the Square IPO? What implications do you think such a move carries for Square? Do you think going public will allow Square to expand, achieve scalability and become profitable? Or do you think Square might be better off being a private entity.
Thanks for reading guys!