chip-reader-front-Square

Square May Go Public in October

September 28, 2024         By: Asif Imtiaz

Fortune reported that credit card processor Square is planning to initiate its Initial Public Offering (IPO) within the next two weeks.

During the last round of private funding, investors valued Squire as a $6 billion company.

The report also claimed that Goldman Sachs is going to be the lead underwriter of the Square IPO, while Morgan Stanley and JPMorgan Chase will also participate in the process.

If Square indeed files an IPO in October 2015, they would have to file an S-1 form and it would enable the company to start investors within a month from the date of the filing. Square management has yet to disclose the price of the share.

Earlier in July, Bloomberg reported that Square has submitted a confidential filing with the U.S. Securities and Exchange Commission (SEC) under the Jumpstart Our Business Startups Act, better known as the JOBS act.

Under the JOBS act, companies with annual revenue below $1 billion are allowed to file an IPO with the SEC privately. Square took full advantage of this opportunity to work out the details with the SEC outside the media scrutiny.

Industry analysts are still questioning why Square picked this particular time to go public as there are several macroeconomic concerns, namely the Chinese economy led market crash a few weeks ago and the possibility of a rate hike by the US Federal Reserve, which can push the market much lower.

However, it appears that Square would benefit from a current bullish market environment and can price the stock much higher now.

If they file the IPO in next two weeks, they would be asking for public funds in an industry environment that is gradually moving away from credit cards to online wallet providers. Google and Apple, both are now offering wallet service and accepting wallet type payments are increasing becoming popular in the United States.

Hence, general investors may also question long-term the growth potential of a plastic card processing company.