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Mobile payment company Square Inc. (NYSE: SQ) will make its debut as a public company on Thursday, Nov. 19, and we've been reviewing the Square IPO filing for details.
The Square IPO is one of the most highly anticipated initial public offerings of the year. But there are some serious questions about the company's business, growth prospects, and valuation ahead of the deal.
Here are all the must-know details from the Square IPO filing…
The Square IPO Filing's Most Important Details
- The company will list on the NYSE under the ticker "SQ."
- The Square IPO price range has been set at $11 to $13 a share. That price range is sharply lower than the widely discussed range of $22 to $24 many analysts expected.
- The company will sell 25.7 million Class A common shares. The Start Small Foundation, a charitable fund created by CEO Jack Dorsey, will sell about 1.35 million shares.
- The Square valuation may be as high as $4.2 billion in its trading debut. That's a significant cut from the $6 billion the company sought in its last funding round in 2014.
- At the high end of the Square IPO price range, the company is seeking a premium of about 75% compared with payment-industry peers, according to Wedbush Securities.
- Investors including JPMorgan Chase & Co. (NYSE: JPM) and Rizvi Traverse paid $15.46 a share prior to the IPO. They required that the IPO must price at $18.56 a share or higher, otherwise they are entitled to receive additional common shares, Square's IPO filing shows. Those firms will also get their money back before any other investors in the event the company is sold.
- Square typically charges merchants 2.75% to swipe credit cards through its reader, according to the company's website. The bulk of that money is spent on fees to payment networks, other financial intermediaries, and fraud costs.