10 ms·
Square files for IPO
- jasondc 11y agoJack Dorsey still owns close to 25% of Square, pretty incredible: http://www.sec.gov/Archives/edgar/data/1512673/000119312515343733/d937622ds1.htm http://www.sec.gov/Archives/edgar/data/1512673/0001193125153...
- austenallred 11y agoHow many people have simultaneously been CEO of two separate public companies? The list has to be pretty small. No wonder Twitter waited so long to make Jack the official CEO.
- colinbartlett 11y agoIt must mean he committed to stepping down there. Maybe he just agreed to see it through the IPO then walk away? As another user said here, how many people have been the CEO of two public companies at once? (Would actually really like to know.)
- uptown 11y agoThe Two-Company CEO, Exotic but Not Extinct By Marc Hogan http://thirdcreekadvisors.com/wp/wp-content/uploads/2013/10/TCA-Agenda-10.14.13.pdf http://thirdcreekadvisors.com/wp/wp-content/uploads/2013/10/...
- iamchmod 11y agohttps://en.wikipedia.org/wiki/Steve_Jobs https://en.wikipedia.org/wiki/Steve_Jobs Apple & Pixar
- Reedx 11y agoCommon misconception. Jobs was Pixar's main investor, but he never ran the company.
- dejawu 11y agoCarlos Ghosn, CEO of Renault and Nissan, comes to mind. https://en.wikipedia.org/wiki/Carlos_Ghosn https://en.wikipedia.org/wiki/Carlos_Ghosn
- rpedela 11y agoI like Square's product but the growing net losses concern me.
- deleted 11y ago[deleted]
- goodcjw2 11y agodoes this come actually faster than expected? will jack actually leave?
- deleted 11y ago[deleted]
- harryh 11y agoYou talk about a super high PE and the fact that they have negative earnings in the same sentence. Do you know what these words mean?
- caminante 11y agoI think he was joking.
- gchokov 11y agoDon't beat me so hard. I know what they mean. So what? When you have P/E 250 I am pretty sure you have negative fundamentals, and you have some financial engineering in place to show "something".
- andy_boot 11y agoIf they are making a loss this implies they are not paying dividends. Therefore how can PE ratio be positive ?
- ketralnis 11y agoIf he doesn't, you haven't helped him at all. You've just derided him with no pointers to educate himself. If he does, then maybe you could give the charitable interpretation of that he's joking.
- myth_buster 11y agoWe generated net losses of $85.2 million, $104.5 million, and $154.1 million in 2012, 2013, and 2014, respectively. As of December 31, 2014, we had an accumulated deficit of $395.6 million. For the six months ended June 30, 2015, we generated a net loss of $77.6 million. As of June 30, 2015, we had an accumulated deficit of $473.2 million. Could someone explain the motive to go public while operating in the losses? Isn't the public market more averse to companies operating in the negative. Also wouldn't the timing act more as a distraction for Jack?
- dexterdog 11y agoWhat are you using logic for? This is the next Jobs we're taking about.
- meatysnapper 11y agoWhat if Twitter was going to be packaged up for sale, or already was, and there was a buyer lined up for a sale within 3-6 months?
- cft 11y agoThat buyer would have to be insane. Other than a pivot (Periscope?), there is no 17bn dollar business there, only a circle jerk and bot traffic.
- mkorfmann 11y agoSo, it's like HN?. On a more serious note: Twitter has a large following of powerful/smart people who don't leave over night. Sure, over time these people could leave, but why would they? What would a twitter competitor offer that twitter can't offer?
- gdw2 11y agoI recently read how Salesforce is worth nearly $50 billion but has never turned a profit[1][2]. [1] https://en.wikipedia.org/wiki/Salesforce.com https://en.wikipedia.org/wiki/Salesforce.com [2] http://www.npr.org/sections/money/2015/10/09/447249562/episode-656-bubblelicious http://www.npr.org/sections/money/2015/10/09/447249562/episo...
- gsibble 11y agoTheir pace of losses are increasing at about 50% more per year. Most companies that file to go public are at least losing less money over time with a path to profitability. I don't see how this bodes well for a strong IPO.
- meatysnapper 11y agobecause the future looks worse, and they want to make some money while they still can?
- ovulator 11y agoBut you can also have to look at it as a percent of revenue. If their revenue growth is 100%, 200%, 500% then those losses are diminishing as a percentage of revenue. I actually didn't look up what their revenue growth was, I am just saying that is the case. But either way, it doesn't paint a really rosy picture.
- lquist 11y agoFuck. Seriously. Fuck. This could be the IPO that ends the party. One of the top candidates for first Unicorpse (see also Evernote).
- gchokov 11y agoMaybe we should all go IPO with our home made app.
- deleted 11y ago[deleted]
- rokhayakebe 11y agoThis could be the IPO that ends the party. What is your rationale?
- VLM 11y agohttps://en.wikipedia.org/wiki/Flooz.com https://en.wikipedia.org/wiki/Flooz.com
- aaronbrethorst 11y agoWell, shit. I guess we better get back to building solidly profitable companies that can be started with the contents of our savings accounts, and don't require $600mm in VC funding!
- DarthMader 11y agoDropbox has gotta be in danger too
- tinkerrr 11y ago> In the third quarter of 2012, we signed an agreement to process credit and debit card payment transactions for all Starbucks-owned stores in the United States. The agreement was amended in August 2015 to eliminate the exclusivity provision in order to permit Starbucks to begin transitioning to another payment processor starting October 1, 2015. Under the amendment, Starbucks also agreed to pay increased processing rates to us for as long as they continue to process transactions with us. We anticipate that Starbucks will transition to another payment processor and will cease using our payment processing services prior to the scheduled expiration of the agreement in the third quarter of 2016, and, in any event, we do not intend to renew it when it expires. In addition to the $150 million loss in 2014, looks like the revenue side doesn't look too good either. From their operating data, Total revenue = $707.8 million Starbucks revenue = $123 million So they would likely lose > 17% revenue very soon.
- 2bluesc 11y ago> So they would likely lose > 17% revenue very soon. It looks like they loose money on every single Starbucks transaction. Sounds like a good thing.
- roymurdock 11y agoAt this stage it's not about profit...it's about volume. They need to become so big that their scale takes care of profit problems. So it's terrible that they're losing such a huge customer.
- mikeryan 11y agoAt which stage? They're going public, they're not a startup anymore. If they're still high growth they'd be going after another funding round instead of an IPO.
- roymurdock 11y agoAt the stage of still being unprofitable. Just like Twitter and Amazon, which are also both public companies. Filing for an IPO does not mean you're slowing growth...it's just an alternate form of fundraising that allows a different mix of investors to join in on the fun.
- dsugarman 11y agodoesn't the roadshow require an enormous amount of time for the CEO? Can you really do this and anything else?
- zinssmeister 11y agodepends, you can do it in a few days if you want. Oliver Samwer famously did his in 5 days when Rocket Internet went public in Germany.
- xal 11y agoYes, it's morning to evening every second booked during the roadshow. You can get it done in a single (7 day) week if you really want to take that risk.
- spike021 11y agoWould it make more sense for a larger company to buy Square before it goes public? I thought I'd heard people saying Apple or Google should but I'm not sure how much benefit there would be since they have payment systems now.
- JonFish85 11y agoApple doesn't need it: they have Apple pay, and probably aren't interested in making the Square dongle work for off-brand devices. Google also has their own hardware & payment system. What does Square offer that Google doesn't already have, more or less?
- dragonwriter 11y ago> Google also has their own hardware & payment system. What does Square offer that Google doesn't already have, more or less? Square's user base and momentum on the retail side. Even if there is nothing special in the technology, they might be worth buying for that.
- sangnoir 11y agoHow much is that user base and momentum worth? Billions?
- psophis 11y agoI don't think there would be any benefit. Square was revolutionary when they were the only one with mobile card reader technology. Now everyone has it. The only thing they have going for them is their _brand_. Apple historically hasn't bought anything that they can easily do on their own. Google much the same.
- Laaw 11y agoCounterpoint: Beats.
- throwaway41597 11y ago
- kzhahou 11y ago> All executive officers and directors as a group (13 persons) .... 61.5% LOL 13 people in the company own more than half. The thousands of employees get to split what's left after investors. 13 people will become BILLIONAIRES and centi/multi-millionaires, while the rest of the company that toiled for years gets (maybe) a down payment on a 1800sqft house on the peninsula. Meanwhile everyone rails against wall street inequity and the Walton family and whoever else...
- dragonwriter 11y ago> 13 people will become BILLIONAIRES and centi/multi-millionaires I think you mean "hecto" rather then "centi". A centimillionaire has assets worth on the order of $10,000.
- ph0rque 11y agoCentimillionaire does sound better than thousandaire, however.
- deleted 11y ago[deleted]
- adventured 11y agoCentimillionaire is commonly used to refer to someone with assets of $100 million or more. From dictionaries, to lay people, to business publications, it's practically universal. I understand what you were aiming for, however centimillionaire is the correct usage. http://www.merriam-webster.com/dictionary/centimillionaire http://www.merriam-webster.com/dictionary/centimillionaire "A Deceased Centimillionaire Leaves $1.2B To Save Parts Of Rust Belt America" http://www.forbes.com/sites/abrambrown/2015/07/22/a-deceased-centimillionaire-leaves-1-2b-to-save-parts-of-rust-belt-america/ http://www.forbes.com/sites/abrambrown/2015/07/22/a-deceased... http://www.thefreedictionary.com/Centimillionaire http://www.thefreedictionary.com/Centimillionaire "Unlucky Echelon of Ex-Centimillionaires Sees Stakes Plunge as Net Craze Fades" http://www.wsj.com/articles/SB972002051942176166 http://www.wsj.com/articles/SB972002051942176166
- jgalt212 11y agoIt is really disheartening that a company with such horrible numbers thinks they can go public. It's one thing to lose money before going public, and it's entirely another thing to lose money at increasing rates of speed and think you can find an audience for those shares.
- pnathan 11y agoSquare is incredibly common these days at farmers markets and coffeeshops. This class of products has a lot of win going for it; I don't know if Square is going to own that market, but they have a huge advantage right now. I look forward to reading their financials. edit: a roundup from the WSJ, Fortune, and other random news places suggests strong concern over the CEO situation. That seems fair. I would definitely discount the value of a non-profitable company with a part-time CEO. :-/ That said, having a "stupid simple and ubiquitous payment platform" should be a really easy way to print money. Why hasn't it? I think that story is the interesting one.
- davidcelis 11y agoThis is anecdotal, but I feel like I see Square's competitors just as much as Square at coffee shops and other small businesses these days. I wonder if there are some easy-to-find numbers for how many businesses use Square vs. Flint or others?
- jonesb6 11y agoFurthermore Stripe is highly visible in places like the Bay Area, where I believe many HN members are located. I wonder what the numbers are for Stripe adoption outside of major tech hubs.
- runako 11y agoStripe doesn't do POS systems. You're not likely to see a lot of Stripe POS systems in the Bay Area or elsewhere. Their prominence in the Bay Area is because they cater to developers who build stuff that uses credit cards. Square primarily does POS systems. I don't believe the two companies really compete in any real way yet.
- seekingcharlie 11y agoSquare, in terms of market share, is relatively tiny. First Data is practically 90% of payment terminals in the US.
- 11y ago
- uptown 11y ago"I believe so much in the potential of this company to drive positive impact in my lifetime that over the past two years I have given over 15 million shares, or 20% of my own equity, back to both Square and the Start Small Foundation, a new organization I created to meaningfully invest in the folks who inspire us: artists, musicians, and local businesses, with a special focus on underserved communities around the world. The shares being made available for the directed share program in this offering are being sold by the Start Small Foundation, giving Square customers the ability to buy equity to support the Foundation. I have also committed to give 40 million more of my shares, an additional 10% of the company, to invest in this cause. I’d rather have a smaller part of something big than a bigger part of something small. We intend to make this big! Thank you for your support and potential investment in Square. Jack"
- econner 11y agoThese were probably given as options and at the current market price rather than Jack's super low strike price. How do you make something valuable? Convince others it has value, and do it with only 20% of your stake.
- mikeyouse 11y agoCome on.. Jack already gave 15 million shares which represented 20% of his own equity back to the option pool and to a foundation to help underserved communities, and he's committed to giving an additional 40 million shares to the foundation.. He's going to give away ~75% of his ownership in the company he founded to employees and entrepreneurs in underserved communities. Whatever the price is on IPO day, this will surely amount to him giving away at least a billion dollars. I can't fathom why people are so cynical, this is amazing.
- adventured 11y agoEnvy, greed, and or the general dislike of seeing other people succeed is almost always the explanation. That's why the same reaction happens over and over again, regardless of who it is that is getting rich. It's common believed that to get rich, you must take that wealth away from someone else (or otherwise do something dastardly); the limited pie of wealth fallacy.
- iamleppert 11y agoLook at those numbers! And for those to say that Square is innovative...their reader was basically all they had back in the day. Now that everyone has created a Square clone, payment processing is a race to the bottom and all about brokering deals with large merchants and hope that the banks and processing networks don't eat your lunch. Throw in all the regulatory hassle of dealing with money and its transfer, as well as liability for fraud, and competing in an industry as exciting as refrigerators...
- femto113 11y agoRefrigerators still see some innovation e.g. the recent "I put a door in your door..." trend: https://www.youtube.com/watch?v=WHYTRcQF5wk https://www.youtube.com/watch?v=WHYTRcQF5wk
- sremani 11y agoI have to agree, even Intuit is in the game. Unless Square has a unique payment processing system that is some how oh so better than the rest of the processing world, there is nothing much here.
- jackgavigan 11y agoActually, Intuit came up with the idea for using mobile phones to accept card payments in 2007 - long before Square. 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. Square announced their card reader in December 2009 and didn't actually launch until the following May.
- qopp 11y agoIsn't this good for startups in general? Every time a startup IPOs the investors now have a chance to exit and re-invest in other startups with the fresh capital.
- CameronBanga 11y agoTrickle down economics has never really ever proved to provide value like that.
- lalos 11y agoA smarter strategy would be to invest more conservatively after a risky yet big one paid off
- stanleydrew 11y agoIt's a little more complicated. This will likely mean a good return for the VC funds that invested early. But VC funds to my knowledge don't reinvest returns directly. Rather they raise another fund, often from the same LPs. And note that this usually happens multiple times before the return on the first fund is known. So it will likely take some time for VCs to liquidate their position, return the capital to LPs, and then have the LPs reinvest in the same or other future VC funds. All that said, a good return on a single investment will be seen positively by LPs and will make it easier for a VC to raise future funds, which is generally good for startups. My only real point is that the money made directly from the Square IPO will likely not be deployed for quite awhile, and other events can turn momentum against startups in the meantime.
- rokhayakebe 11y agoJack, the Roger Bannister of his field.
- marincounty 11y agoDoes anyone know, off hand, if Square has any important patents? I did a little searching, but couldn't find much. I do like the company. Just curious if they have any patents that will prevent competition?
- krschultz 11y agoPatents are far from the only thing that prevents competition. Brand is arguably more important, and Square's brand is decent. I'd argue their biggest risk is that many merchants get frustrated with the swipe reader.
- kochb 11y agoQuick link to Square's full S-1 filing: https://www.sec.gov/Archives/edgar/data/1512673/000119312515343733/d937622ds1.htm https://www.sec.gov/Archives/edgar/data/1512673/000119312515...
- curiousjorge 11y agoNovember 2016: Square files for Bankruptcy. Do the simple math, they lose money year after year in bigger amounts. This will buy Square some time while it shops around for a buyer but that's assuming the capital market is still liquid and happy and there's no market downturn.
- deleted 11y ago[deleted]
- manchco 11y agoI don't know how he does it. http://imgur.com/QfNiUz3 http://imgur.com/QfNiUz3
- sjg007 11y agoThe money in credit card processing is in high interest loans fronted to the merchant that are paid back as a percent of the transaction. SquareUp for instance.
- misiti3780 11y agoSo apparently Square and Box have both raised about the same amount of money, roughly $550-600MM [1][2], but somehow Jack Dorsey still holds 25% and Aaron Levie wound up with ~ 4% - Does anyone else find that surprising? https://www.crunchbase.com/organization/box#/entity https://www.crunchbase.com/organization/box#/entity https://www.crunchbase.com/organization/square#/entity https://www.crunchbase.com/organization/square#/entity
- austenallred 11y agoNo. Jack was a co-founder of Twitter, so it was a completely different game for him. Levie was a nobody with an idea, and had to raise at almost egregious terms at times to stay alive.
- burger_moon 11y agoWell square started after Twitter was successful right? So Jack probably had enough personal money to finance a lot of Square. Was Aaaron Levie rich before starting box? I'm on mobile so I don't know the ans Ed to that, but it sounds logical at the moment to me.
- prostoalex 11y agoBox was also forced to print shares for Coatue and other late-stage investors who wanted a guaranteed liquidation preference in exchange for awarding the company with a unicorn label https://pando.com/2015/01/09/ipo-of-last-resort-box-has-no-choice-but-to-go-pubic-despite-its-ugly-numbers/ https://pando.com/2015/01/09/ipo-of-last-resort-box-has-no-c...
- gmisra 11y agoDoes anybody else get the feeling that the primary goal of large scale venture capital these days is to pump-and-dump IPOs, regardless of the actual stability/validity of the underlying business?
- prostoalex 11y agoChoosing between public stock with certain price at the end of any given day, and private stock with a dubious price that has not been "marked to market", LPs prefer the former. Who can blame them?
- thadjo 11y agoWhat on earth did Lawrence Summers do for his +1M shares? HT Felix Salmon.
- hamburglar 11y agoYow, from their filing: "Transaction and advance losses for the six months ended June 30, 2015, increased by $13.9 million. We incurred a charge of approximately $5.7 million related to a fraud loss from a single seller in March 2015." I bet March 2015 was not a fun month at Square.