Square Files Confidential IPO(wsj.com)
wsj.com
Square Files Confidential IPO
http://www.wsj.com/articles/payments-startup-square-files-confidential-ipo-1437782181
9 comments
PayPal started in 1999 as a way to "beam" money from one Palm Pilot to another via the infrared port. You'd load your Palm up with money from your bank / credit card, then use it like cash on your mobile device. http://archive.wired.com/science/discoveries/news/1999/07/20...
Nice to see this timeline. After a failed photo startup, we launched Credit Card Terminal for iPhone in October 2008. It took Apple around two months to approve it, during which we received one of the famous "requiring unexpected additional time for review" emails. I'm pretty sure they didn't quite know what to make of it back then. April 2009 really kicked things off though when Apple put our app, along with Print n Share and FedEx, in a "There's an app for that" tv ad. https://www.youtube.com/watch?v=oZxpljDz4Wc
Once again proving that there are very few new _ideas_ out there. It's all about better execution.
Converting the Mag-stripe into an audio signal that could be sent through the headphone jack was pretty clever and enabled very cheap devices. And correct me if I'm wrong but I believe square was first there.
Also timing. Mobile devices have come a long way in that time period, as has ecommerce.
the brilliance was creating a device cheap enough to distributed at low/no cost in large quantities. And that's what everyone then copied.
Can anybody explain why a company would want to file for an IPO in confidentiality?
Wouldn't it be in the best interest of the company to get some PR going before the roadshow starts?
Unless they just want to test the waters and intend to pull the IPO in case they wont get the valuation they hoped for... (which again would be a terrible signal for potential IPO investors)
Wouldn't it be in the best interest of the company to get some PR going before the roadshow starts?
Unless they just want to test the waters and intend to pull the IPO in case they wont get the valuation they hoped for... (which again would be a terrible signal for potential IPO investors)
They don't have to publish all of their financials just yet. With the confidential IPO process, they can send in their mostly-correct figures and go through some back-and-forth with the SEC to ensure they are reporting earnings etc in a manner that satisfies the SEC. If they disclosed their figures publicly, as larger companies going public are required to do, they risk a backlash from investors or the media when they later revise their figures, even if due to an honest mistake. Keeping their figures secret from competitors, suppliers and customers for as long as possible is also a competitive advantage.
Just remember all the terrible press Groupon got whenever the SEC didn't like the non-gaap gimickry in their original S-1.
http://www.cbsnews.com/news/groupon-tries-to-make-the-sec-ha...
http://www.cbsnews.com/news/groupon-tries-to-make-the-sec-ha...
To me, Square seems a bit rudderless, but to others I'm sure they take that as being opportunistic. Despite Stripe's valuation, most hold that credit card processing fees are not the keys to riches.
Their lending operation is pretty interesting. If structured as a payday loan operation for businesses, it can be quite profitable albeit fraught with regulatory and/or reputation risk. If not structured as a payday loan biz, I don't think there's much meat there. Low credit borrowers won't repay, and higher credit borrowers can seek credit from other sources a much lower rates. e.g. the securitized market. e.g. it's much cheaper for a business owner to borrow against his house to fund his biz than for he or she to borrow from Square.
Such a payday loan biz was just bid on Shartank.
http://boss.blogs.nytimes.com/2013/11/19/assessing-a-kevin-o...
Their lending operation is pretty interesting. If structured as a payday loan operation for businesses, it can be quite profitable albeit fraught with regulatory and/or reputation risk. If not structured as a payday loan biz, I don't think there's much meat there. Low credit borrowers won't repay, and higher credit borrowers can seek credit from other sources a much lower rates. e.g. the securitized market. e.g. it's much cheaper for a business owner to borrow against his house to fund his biz than for he or she to borrow from Square.
Such a payday loan biz was just bid on Shartank.
http://boss.blogs.nytimes.com/2013/11/19/assessing-a-kevin-o...
The business I work for uses Square Stands for POS, and we've noticed they've been steadily adding additional paid value-adds mostly relating to customer contact/retention to their dashboard system.
They don't seem to be confining themselves to processing and loans for increasing revenue, but are trying to become a basic ERP/marketing provider as well. Sage/Moneris already does the same thing so it makes sense.
They don't seem to be confining themselves to processing and loans for increasing revenue, but are trying to become a basic ERP/marketing provider as well. Sage/Moneris already does the same thing so it makes sense.
Housing is about to get even more expensive in SF...
How so?
Many times, when a bay area company IPOs, a number of people suddenly have a lot of now liquid wealth. (well depending on lock outs in 90 - 180 days) It is not uncommon for those people to want to get off the rent/mortgage treadmill and they will convert their stock into a house because stocks go up and down, but buying a house for cash means you always have a nice place to come home to. And that drives up prices as houses are already scarce.
How many people work for square?
Here is a different answer, Zillow[1] seems to think there are about 1,200 homes (approximately) are for sale in San Francisco. If 120 people buy homes for cash it takes 10% of the available inventory off the market.
[1] http://www.zillow.com/homes/for_sale/San-Francisco-CA/pmf,pf...
[1] http://www.zillow.com/homes/for_sale/San-Francisco-CA/pmf,pf...
After Twitter and Facebook IPOs, there were bidding wars between home buyers that resulted in some homes selling for a million over asking price.
I believe the parent is talking about a bunch of people getting substantial liquidity events, and therefore having more money to chase scarce housing.
Does anyone know where to find IPO dates? I can't seem to find the day that the IPO will take place. In this case they didn't fully finish their filing, but other ones such as BOX, I didn't find out about the IPO until the actual day.
In order to participate in an IPO, one must be a customer of one of the underwriting banks (special exceptions may exist), these banks would let you know of the exact dates as they become firm. One cannot determine exact dates just from an S-1 filing, as the companies still have to go through their whole roadshow/ investor wooing period. If you want to see the SEC's list of companies that intend to go public, it's on their site:
http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=&type=s...
http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=&type=s...
If you are trying to find out when they start trading in the open market, this site has a calendar: http://www.iposcoop.com/index.php?option=com_content&task=vi...
That must mean they had trouble raising more privately!
Not necessarily.
They could be ready and this is the next logical step. Earlier investors could be pushing for liquidity. Maybe some of the early people - especially founders - want to move on and do the next thing.
On the last point, non-trivial share holders are generally locked up from selling for 3-6 months after the IPO to reduce the likelihood of a "pump & dump" scheme.
They could be ready and this is the next logical step. Earlier investors could be pushing for liquidity. Maybe some of the early people - especially founders - want to move on and do the next thing.
On the last point, non-trivial share holders are generally locked up from selling for 3-6 months after the IPO to reduce the likelihood of a "pump & dump" scheme.
They may also be hoping to ride PayPal's rich valuation.
With investors awarding such extreme valuations to Facebook, Netflix, Amazon, Twitter, PayPal, LinkedIn - Square might just think they can land a $10+ billion public value.
With investors awarding such extreme valuations to Facebook, Netflix, Amazon, Twitter, PayPal, LinkedIn - Square might just think they can land a $10+ billion public value.
I like the conspiracy theory that Square filed to IPO in hopes of forcing a quick acquisition by Google / Apple / Amazon / Paypal so that Jack could go take over the CEO position at Twitter. Clearly unlikely but the intrigue is fun.
Please don't swap out original URLs with Google links, even when the URL is paywalled. HN requires original URLs.
It's ok, though, to post a comment to the thread explaining to people how they can read an article. In fact, someone almost always does.
It's ok, though, to post a comment to the thread explaining to people how they can read an article. In fact, someone almost always does.
Here's how you can read the article ;)
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
Who has the iOS compatible bookmarklet that will let me do this with one tap?
Non paywall link: http://www.wsj.com/articles/payments-startup-square-files-co...
Actually, Intuit came up with the idea for using mobile phones to accept card payments in 2007. They ran trials in the Bay Area in summer 2008, launched GoPayment properly in early 2009 (with a Bluetooth reader supporting various feature phones), and launched an iPhone app in August 2009. Inner fence had already created a card terminal app for the iPhone in late 2008 (albeit without a reader device).
Square announced their card reader in December 2009 and didn't actually launch until the following May.