Investors who owned stocks in the past five years generally experienced some big gains. In fact, Since Nov. 19, 2015, the SPDR S&P 500 SPY total return is 74.7%.
On that day, Square Inc SQ held its IPO, and IPO investors have significantly outperformed the market in the five years that have followed.
Square’s Big Debut: Digital payment pioneer Square was founded in 2009 and made the move to go public just six years later. It priced its IPO at $9 per share, slightly short of its targeted range of between $11 and $13. Square raised $243 million at a valuation of around $2.9 billion.
At the time of its IPO, Square’s valuation was down more than 50% from the $6 billion valuation indicated in a private fundraising round in 2014.
After selling IPO shares at $9, Square shares hit the ground running, opening at around $11.20 per share and continuing upward to as high as $15.91 in early 2016. At that point, the stock cooled off and dropped back to as low as $8.42 in mid-2016. From mid-2016 to late 2018, Square went on a historic run that carried the stock all the way up to $101.15.
In January 2018, Square announced its Cash App would begin allowing users to buy and sell bitcoin.
From late 2018 to early 2020, Square mostly traded in a wide, sideways trading range of between $50 and $85.
Recent News: The COVID-19 sell-off sent the stock as low as $32.33 in March, but investors soon realized the socially-distanced environment would actually provide a massive tailwind for the company’s business.
In the second quarter, Square reported 63% revenue growth and exceeded analyst EPS estimates as well.
The stock hit $100 in June, $150 in August and ultimately peaked at $193.44 in October before pulling back to around $155.
2020 And Beyond: At the stock’s current level, $1,000 worth of Square IPO stock in 2015 would be worth about $17,222 today.
Looking ahead, analysts see even more gains ahead in the next 12 months. The average price target among the 36 analysts covering the stock is $175 suggesting 12.8% upside from current levels.
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