Square files for IPO

<p><pre><code> We 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. </code></pre> Could someone explain the motive to go public while operating in the losses? Isn&#x27;t the public market more averse to companies operating in the negative.<p>Also wouldn&#x27;t the timing act more as a distraction for Jack?

&gt; All executive officers and directors as a group (13 persons) .... 61.5%<p>LOL 13 people in the company own more than half. The thousands of employees get to split what&#x27;s left after investors.<p>13 people will become BILLIONAIRES and centi&#x2F;multi-millionaires, while the rest of the company that toiled for years gets (maybe) a down payment on a 1800sqft house on the peninsula.<p>Meanwhile everyone rails against wall street inequity and the Walton family and whoever else...

&gt; 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.<p>In addition to the $150 million loss in 2014, looks like the revenue side doesn&#x27;t look too good either. From their operating data,<p>Total revenue = $707.8 million<p>Starbucks revenue = $123 million<p>So they would likely lose &gt; 17% revenue very soon.

&quot;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.<p>We intend to make this big! Thank you for your support and potential investment in Square.<p>Jack&quot;

Square is <i>incredibly</i> common these days at farmers markets and coffeeshops. This class of products has a lot of win going for it; I don&#x27;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.<p>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. :-&#x2F;<p>That said, having a &quot;stupid simple and ubiquitous payment platform&quot; should be a really easy way to print money. Why hasn&#x27;t it? I think that story is the interesting one.

Jack Dorsey still owns close to 25% of Square, pretty incredible:<p><a href="http:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1512673&#x2F;000119312515343733&#x2F;d937622ds1.htm" rel="nofollow">http:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1512673&#x2F;0001193125153...</a>

Fuck. Seriously. Fuck.<p>This could be the IPO that ends the party. One of the top candidates for first Unicorpse (see also Evernote).

Look 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&#x27;t eat your lunch.<p>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...

Quick link to Square&#x27;s full S-1 filing: <a href="https:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1512673&#x2F;000119312515343733&#x2F;d937622ds1.htm" rel="nofollow">https:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1512673&#x2F;000119312515...</a>

So 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?<p><a href="https:&#x2F;&#x2F;www.crunchbase.com&#x2F;organization&#x2F;box#&#x2F;entity" rel="nofollow">https:&#x2F;&#x2F;www.crunchbase.com&#x2F;organization&#x2F;box#&#x2F;entity</a><p><a href="https:&#x2F;&#x2F;www.crunchbase.com&#x2F;organization&#x2F;square#&#x2F;entity" rel="nofollow">https:&#x2F;&#x2F;www.crunchbase.com&#x2F;organization&#x2F;square#&#x2F;entity</a>

Their 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&#x27;t see how this bodes well for a strong IPO.

How 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.

Does 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&#x2F;validity of the underlying business?

It is really disheartening that a company with such horrible numbers thinks they can go public. It&#x27;s one thing to lose money before going public, and it&#x27;s entirely another thing to lose money at increasing rates of speed and think you can find an audience for those shares.

Yow, from their filing: &quot;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.&quot;<p>I bet March 2015 was not a fun month at Square.

I like Square&#x27;s product but the growing net losses concern me.

Isn&#x27;t this good for startups in general?<p>Every time a startup IPOs the investors now have a chance to exit and re-invest in other startups with the fresh capital.

doesn&#x27;t the roadshow require an enormous amount of time for the CEO? Can you really do this <i>and</i> anything else?

Would it make more sense for a larger company to buy Square before it goes public? I thought I&#x27;d heard people saying Apple or Google should but I&#x27;m not sure how much benefit there would be since they have payment systems now.

Does anyone know, off hand, if Square has any important patents? I did a little searching, but couldn&#x27;t find much.<p>I do like the company. Just curious if they have any patents that will prevent competition?

The 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.

Jack, the Roger Bannister of his field.

What on earth did Lawrence Summers do for his +1M shares? HT Felix Salmon.

does this come actually faster than expected? will jack actually leave?

November 2016: Square files for Bankruptcy. Do the simple math, they lose money year after year in bigger amounts.<p>This will buy Square some time while it shops around for a buyer but that&#x27;s assuming the capital market is still liquid and happy and there&#x27;s no market downturn.

I don&#x27;t know how he does it. <a href="http:&#x2F;&#x2F;imgur.com&#x2F;QfNiUz3" rel="nofollow">http:&#x2F;&#x2F;imgur.com&#x2F;QfNiUz3</a>