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Payment services startup square has confidentially filed with US regulators for an initial public offering, according to multiple reports surfaced on Friday.
According to anonymous inside sources, the company has decided to make its debut on the stock market. Companies can begin the process confidentially if they generated less than $1 billion in revenue the year before. The process is stated to begin this fall, with Goldman Sachs reportedly acting as underwriter to the process.
The reveal immediately raised questions about the future of CEO Jack Dorsey, who also took on the position of interim CEO at social media giant Twitter last month. Dorsey owns a 26.2 per cent stake in Square, valued at over $6 billion and is one of the startups co-founders.
Mr. Dorsey also co-founded Twitter and was named interim CEO as the former chief executive, Dick Costolo, left the company after five year in June amidst Wall Street criticism of it stagnating since going public in late 2013. Mr. Dorsey returned to the company after a period of absence and has reportedly become involved into planning its long-term strategies.
Analysts and pundits are debating whether Mr. Dorsey can possibly manage the two companies at the same time. If the answer is no, it is expected that he will renounce the Twitter position; despite being the bigger company and a worldwide renowned service, Dorsey would certainly have a less of say there than with Square, with the latter also having better growth prospects in the near future.
The second possibility is also fueled by the fact that regulators would probably not allow him to be chief executive of two public companies at the same time. Neither Square nor Twitter representatives have offered any comment on the reports to date.
Square has steadily expanded from providing credit card readers into mobile payments and lending, with its peer-to-peer mobile app Square Cash processing over $1 billion in transactions per year. Going public would certainly give the company necessary funds to expand into its next phase and explore new domains.
Twitter is set to reveal its quarterly earnings to investors on Tuesday. The company is reportedly looking for solution for a new permanent executive, employing specialized search company Spencer Stuart to find outside possibilities. However, company CFO Anthony Noto is also allegedly considered for the position. Noto gained notoriety last fall for mistakenly tweeting what was supposed to be a private message to one of his co-workers, in which he recommended buying an unnamed company.
Image Source: Forbes
