Squarespace, the website building and hosting company famous for its intuitive and inventive design formats, has recently announced that it will seek an initial public offering (IPO) sometime in 2021. Investors interested in the ecommerce industry are already beginning to prepare for Squarespace’s debut on the market.
But you don’t need to be an institutional investor to buy shares of Squarespace’s stock when it first enters the market. Learn how to buy stocks and get involved in Squarespace’s upcoming IPO with our guide.
When is the Squarespace IPO Date?
Though Squarespace announced that it would pursue a public listing in January 2021, the company still has not released an official date when shares will be traded publicly. It could be months or even more than a year before Squarespace is able to completely comply with the lengthy process required by the Securities Exchange Commission (SEC) to go public.
Squarespace Financial History
Squarespace began as a personal project of founder Anthony Casalena while he was attending the University of Maryland. By the time Casalena graduated, Squarespace was already producing revenues of about $1 million annually.
In the company’s 1st round of funding in 2010, Squarespace received $38.5 million from venture capital projects like Index Ventures and Accel Partners.
Squarespace’s annual revenue has grown steadily since 2006, when the company was bringing in about $1 million annually.
From 2009 to 2012, Squarespace’s annual revenue grew by about 266%. By 2015, the company had grown to bring in more than $100 million in revenue annually.
Squarespace’s most recent valuation has estimated that the company is worth more than $1.7 billion following another round of funding that brought the company an additional $400 million.
Squarespace Potential
If you’ve ever considered making your own website, chances are that you’ve used (or at least encountered an advertisement for) Squarespace. The company’s unique processes have made it significantly easier for those with little technical knowledge to extend their businesses into the online sphere.
Squarespace’s ready-made templates and membership pricing make it an attractive option for both those who need design assistance without paying for a full-service graphic designer.
Squarespace isn’t alone in its domain. Following its IPO, the company seeks to move into web hosting, which will increase its competitor to include already-public companies like GoDaddy and Wix.com. Moving forward, Squarespace will need to balance its year-over-year revenue growth and extend its services into new, competitive markets.
How to Buy Squarespace IPO Stock
If you’re already familiar with the process of how to buy stocks, you might be surprised to learn that the process to invest in an IPO is fairly similar to the process of buying and selling standard shares of stock. If you already have a brokerage account, you likely already have everything you need to prepare for the Squarespace IPO.
If this is your 1st time buying stock, you need to do a little more prep work. But getting started with your first brokerage account doesn’t need to be challenging. Follow these steps to buy a share of stock and invest in the market so you’re prepared when Squarespace’s IPO arrives.
- Pick a brokerage.
A broker is a financial service company that can help you start buying and selling shares of stock. Though many people think of the bustling day-to-day activities of Wall Street when they hear the term “stockbroker,” the truth is that most stock trading is now done online with the help of trading platforms.
When you choose a broker and open a brokerage account, your service provider will also offer access to an online trading platform. As a retail investor, you can use this platform to place orders to buy and sell shares of stock at specified times and prices.
Your broker will then carry out your trades, sometimes in exchange for a small commission or service fee. This makes it possible for everyday investors to participate in the stock market.
There are dozens of brokers offering access to U.S.-based exchanges like the New York Stock Exchange and the Nasdaq. Some of the factors you might want to consider when you compare brokers can include:
• Commissions and fee structures
• The types of accounts you can open
• Account minimums and withdrawal limits
• Access to forex, options, cryptocurrencies and additional types of financial securities
• Customer service availability and contact options
• The type of trading platform the broker offers
• Availability of mobile trading or platforms specifically designed for use on a tablet - Decide how many shares you want.
When your account is fully opened, you can decide how many shares of Squarespace’s stock you want to buy. Squarespace hasn’t yet announced the type of IPO it will pursue and whether it will set the price of shares before it enters the market or allow shares to be traded at the current market rate.
As more details are revealed concerning the IPO, you’ll be able to better budget how many shares you’d like to purchase. - Choose your order type.
When you know how many shares of stock you want to purchase, the next step is selecting your order type. There are multiple types of stock buy orders, and the type of order you choose will determine when your broker will execute your order.
Familiarize yourself with a few of the most common order types below before you begin trading:
• Market order: A market order is executed as quickly as possible at the current market rate the stock is trading at. For example, if shares of Squarespace’s stock are trading at $100 a share and you place a market order to buy, you’ll likely pay around $100 per share. Market orders ensure that your order is filled as soon as possible before the price spikes or dips.
• Limit order: A limit order is executed only at a price that you specify. For example, you might place a limit order to buy 10 shares of Squarespace stock at a price of $100 per share. In this instance, your broker would only execute the order if it was possible to purchase each share at a price of $100 or less.
• Trailing stop order: A trailing stop order is executed when the price of a stock rises above a specific price or sees a percentage price increase that you specify. Trailing stop orders can be useful when considering sell walls.
You may also have access to additional types of orders with enhanced parameters depending on the broker you select. - Execute your trade.
After completing your order form, double-check the details of your order before you submit it to your broker. From here, your broker will execute the order according to the details contained in your order’s instructions.
If your broker is able to fill the order, you’ll usually receive a push notification or email with the details of your purchase. If your broker is not able to fill your order, it may choose to leave the order open through the next trading day or cancel it depending on your account specifications.
Best Online Brokers
The best broker for your needs will vary depending on your personal preferences. If you aren’t sure where you’d like to begin your search, consider a few of the best brokers below.
Should You Invest in IPOs?
Investing in an upcoming IPO can be an exciting way to add a level of diversity to your portfolio — especially when a company that you love has just announced that it’s going to go public.
However, it’s important to remember that even established companies can have a poor showing at their IPOs, and it's normal for stock prices to drop after a successful IPO. As is the case with any company, you should never invest more money than you can afford to lose in a single stock.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.