Square recently filed IPO (initial public offering) paperwork; the current offering is listed at $275 million. Given Square CEO Jack Dorsey’s reinstatement as CEO at Twitter the week prior, investors have voiced some concerns as to how Dorsey’s split commitments will affect operations at both companies.
Square’s filing notes that “[Dorsey’s renewed involvement at Twitter] may at times adversely affect his ability to devote time, attention, and effort to Square.”
Considering the rocky road of Twitter’s performance on the market after going public in 2013, San Francisco mobile app developers and investors with experience following mobile app and technology ventures have reason to be cautious. As for Square, the number of shares has not yet been decided.
In spite of investor caution, Square is clearly a company with big potential. The fact that their instantly recognizable white credit card dongles have so quickly become standard, particularly for smaller merchants, since the company’s 2009 launch suggests the brand is here to stay. Many app developers have been quick to attempt related services, but Square dominates the market by a long shot. Merchants processed approximately $23.8 billion dollars via Square in the last year alone.
That being said, it’s worth noting that Square’s profits are currently headed south. The Verge notes that while the company saw a net revenue of $560.6 million in the first six months of 2014, net losses for the same period clocked in 77.6 million. Furthermore, net losses have been growing steadily since 2013.
Square has been countering these losses by aggressively developing Square Capital, which company statements portray as a future major revenue source. The program is essentially a small business cash advance service, and while the Square Capital program has been somewhat controversial, the company hopes that it will help them spread their income streams and weather economic downturns. According to company statements, similar alternate services and products are currently being investigated.
The fact that Dorsey currently owns almost a quarter of Square suggests heavy optimism about the future of both ventures, at least internally.Tags: app development, dorsey, iOS, iPhone app developer, ipo, jack dorsey, mobile commerce, monetization, security, small business, square, square capital, twitter