Market Overview

Jack Dorsey Begins Square IPO Road Show

Jack Dorsey Begins Square IPO Road Show
  • Jack Dorsey, CEO of Twitter Inc (NYSE: TWTR), is scheduled to participate in Square's IPO road show this week.
  • Dorsey is also the founder and CEO of Square, a mobile point-of-sale tools company.
  • Square priced its IPO last week between $11 and $13 per share.

Square, a maker of a mobile point-of-sale tool, recently filed to go public and valued its IPO at $11 to $13 per share, implying a market value of $3.6 billion to $4.2 billion.

Dorsey will hit the road and travel with a sales team to pitch Square's initial public offering. The task may prove difficult given the fact that Twitter's stock has lost nearly 30 percent over the past year and recently traded as low as $21.01, noticeably below the initial $26 shares were priced at during its IPO in 2013.

Dorsey will also need to defend the $3.6 billion to $4.2 billion valuation of Square – short of the $6 billion the company was valued at during a round of financing back in October 2014.

"Jack seems to not really make it clear what he wants done," a source that is close with the company told New York Post. "His subordinates didn't necessarily feel empowered. People grasped at things trying to please him, and there's a little bit of chaos."

"Past performance is no guarantee of future results," a Square investor also told the publication. "With Square, we are only hoping that's the case."

Square had a tough 2014. The company launched several new services, including payroll, scheduling and mobile wallets. Most were shuttered within a few months and the company is now looking to revive some of these higher-margin services.

A key highlight of Square is its small-business lending unit, named Square Capital. New York Post noted that the segment had lent $300 million through more than 50,000 advanced to clients in September, marking an increase from the $225 million it lent in June.

Should investors (and potential investors) be worried about Square's low valuation?

"No one's super-happy about it," a Square source also told New York Post. "But people are telling themselves, 'Oh, well, seems like they are starting low. Better to price it where something will pop than to come out with something that looks like a dog.'"

Posted-In: Jack Dorsey New York Post Square Square IPONews Management IPOs Top Stories Best of Benzinga


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