Jack Dorsey’s payment company Square will set the price for its much anticipated IPO this afternoon, and the valuation could come in even lower than expected.
CNBC’s Kayla Tausche says her sources are saying Square’s IPO could be priced even lower than $US11. The company will begin trading on NYSE Thursday morning.
Earlier this month, Square set a price range of $US11 to $US13, or about a $US4.2 billion valuation, which was a couple billion dollars lower than the valuation investors gave Square in its most recent private financing. During that round, Square raised $US150 million at $US15.50 per share. The company has raised over $US590 million since its launch in 2009.
If the price does come in lower than expected, it could either be a result of investors showing less interest in Square stock, or the company deliberately setting it low to gain a huge pop on its first day of trading.
Either way, a lowered price range would be a disappointment for the tech sector in general. Square has been one of the hottest startups in recent memory, and it was one of the most anticipated tech IPOs of the year.
It’s also a sign that the tech IPO market in general could be in for a long-term downturn, as there hasn’t been a lot of successful tech IPOs this year.
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