Shares of Square, the payment technology company founded and led by Twitter
CEO Jack Dorsey, rose 45% in their first day of trading on Thursday following a high-profile initial public offering.
The sharp rise to $13.07
saved some face for Square after the shares priced at $9 late Wednesday, well below their expected range. The disappointed had raised questions about investor appetite for the buzzy company and fueled more speculation about a technology bubble.
Shares opened on the New York Stock Exchange at $11.20, giving the company a $3.6 billion market value. During mid-day trading, they rose as high as $14.28 a piece.
The company raised $243 million through the sale of 27 million shares. Dorsey himself made nearly $1 billion (on paper, of course).
While the company was only valued at $2.9 billion at its pricing, shares traded higher throughout the day. The lower pricing triggered a ratchet, which the company’s late-stage investors put in place in a September funding round that valued the company at $6 billion.
Many of these investors will receive extra stock because of the low IPO price. Doing so will dilute the company’s own shares. ).
Square’s listing comes at a time when it appears the company’s losses are growing and revenue growth is slowing. In its original public IPO filing with the SEC, Square reported a $77.6 million loss for the first six months of this year compared to a $79 million loss during the same period in 2014. Meanwhile, revenues rose to $560.5 million from $372 million during the same six months.
In a more recent third quarter filing, Square posted a loss of $53.9 million on $332.2 million in revenue, indicating slower revenue growth than before and widening losses.
This discount in share price could also be attributed to investor concerns over Dorsey’s dual roles as the CEO of Square and Twitter. Earlier this week, Square updated its S-1 filing to include language around Dorsey putting his “full business efforts and time to the company,” despite also being a full-time CEO at Twitter.
But in an interview with Fortune, Square’s chief financial officer Sarah Friar maintained that this was the right time to go public for the company, and the offering was able to give the company more capital on its balance sheet.
Square becomes just the third tech startup to go public in 2015 after being valued at $1 billion or more by private market investors, following Box and Pure Storage.
Square commemorated the its IPO by setting up a small market outside of the New York Stock Exchange where its local vendors using its credit card swiping and register services sell food, art and more. Cheri Mims, the owner of one of the first businesses to start using Square and Marcia Dorsey, a former coffee shop owner and Dorsey’s mom, rang the New York Stock exchange bell to start trading.