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TECH IPOS

 Why you should care about Square, unicorns

and the new tech bubble Want to know why "everyone" is talking about unicorns, Jack Dorsey and a tech firm

called Square? No, not Foursquare. Just Square. It's debuted at the New York Stock 

Exchange and rocketed. Read on.

To be frank, you have every reason not to care about Square and its initial public offering (IPO) on the

New York Stock Exchange on Thursday. You may be one of the many millions of people on the planet

 who h ave never heard of Square - and nor should you ha ve.

But a relatively small and yet influential group has been in a positive tiss about this company and its

going public for weeks, if not months.

 Why? Simple. It's a unicorn.

 And this unicorn just hit the ground running at the New York Stock Excha nge on Thursday. Within

about 30 minutes of trading, shares in Square had jumped 52 percent, from a starting price of $9 to

$13.66.

PrivCo, a research firm, says Square's debut "will set a precedent" for how other unicorns are viewed by 

investors at a time of considerable doubt over tech valuations.

 What the **** is a tech unicorn?

 A unicorn in tech is a privately held company valued at over $1 billion, based on fund-raising alone.

Square is a unicorn - but its unicorn status has been shrinking of late.

 At the time of writing, a list compiled and upda ted by Fortune in August had Square valued at $6

 billion. After its last round of fu nding, however, its estimated market value dropped to just over $4

 billion.

TOP STORIES / SCI-TECH

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 Way above Square were companies such as Uber (upwards of $50 billion), Xiaomi ($46 billion),

 Airbnb ($25.5 billion), Snap chat ($16 billion), SpaceX ($12 billion), Pintrest ($11 billion), and Dropbox

(upwards of $10 billion) - all in the top ten.

 What's shocking a bout the list - aside from the fa ct tha t it's dominated by men - is that some analysts

fear there is no real analysis of these companies' true financial prospects - indicating the potential for

a new bubble in the private tech markets.

Matthew Kennedy, an analyst at Renaissance Capital, described Square's valuation prior to the IPO as

"worrying."

Square set the price per share late on Wednesday at $9. It was somewhat below a price range of $11

and $13 which the company had said it expected in a regulatory filing in early November.

The feeling was, Square wanted to keep the initial price as low as possible so as to maximize its

chances of scoring a huge bump when it hit the trading floor in New York. And if that was Square'stactic, it clearly worked.

So what does Square actually do?

Good question. Square is a tech startup, specializing in a mobile payments. It was founded by Jack 

Dorsey about three years after he co-founded Twitter.

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Jack Dorsey (2nd L) at Twitter's IPO in 2013. He's CEO of Twitter and Square

Square started by offering financial transaction software for smartphones and tablets, as well as

"dongles" that enable the mobile devices to read the magnetic strip on credit cards.

 Will this lead to a mobile payments boom?

Not to be confused with a tech bubble - mobile payments will bloom, whether we like it or not, but they 

may not boom just yet.

 A study published in May by Gartner, an IT research and advisory firm, suggested many consumers

don't trust mobile payment methods.

However, there is growing competition among the tech giants in the US, including Apple, Amazon and

PayPal, who want to shape the future of shopping by changing the way we pay.

Mobile payments are the new tech battleground, but are we heading for a bubble?

In 2014, released the iPhone 6 with software called Apple Pay, which for contactless payments, using

Near Field Communication (NFC) technology. Samsung also has a "mobile wallet" called Samsung

Pay.

But both have a long way to go before they achieve success, with Gartner estimating NFC transactions

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 will account for "only 6 p ercent" of mobile payments in 2018.

Square takes a 2.75 percent commission on transactions using its mobile dongle. Transactions via

PayPal and others also come at the cost of a commission, usually to the seller.

Payment trackability 

But the real issue here is being able to trace payments. Put simply, tech firms and governments want

us to move more and more payments online, because it means our transactions can be tracked.

That may be good for us, but it's even better for them.

In African countries such as Kenya, mobile payments have long had a strong footing

Hence the recent interest in Bitcoin - despite its association with criminal trades on sites like Silk Road

and more recently with the Islamic State terror group. Governments, financial institutions and others

are keen to harness the cryptography used for digital currencies to increase payment security,

 whatever the ends entail.

The US government has even held Bitcoin as "cash" reserves.

The future looks…

Square's IPO was highly anticipated, although regulatory filings on the third quarter showed a net loss

of $53.9 million on revenues of $332 million. But this drop in value ahead of the IPO is precisely what

made it interesting.

 Analysts believe Square's IPO will set a benchmark - or even a correction in p rivate markets - and

shape other anticipated IPOs by Dropbox and Airbnb, for instance.

 As Jack Dorsey - a man who h as seen it all before - must have been quietly confident. Research by 

Ipreo, a market intelligence provider, has Twitter at number three in its ranking of Top Tech IPOs

since 2010. You'd think Dorsey knew what he was doing.

DW RECOMMENDS

IndiGo shares soar in market debut

India's leading airline is celebrating a 'blockbuster takeoff' as shares surged high above their listing price. The IPO

is aimed at solidifying IndiGo's grip on one of the world's fastest growing aviation markets. (10.11.2015)

Fiat-Chrysler makes a killing from Ferrari IPO

 After t he US-Italian car giant brought a 10-percent st ake of t he legendary racing car brand to Wall S treet last

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Date 19.11.2015

Author   Zulfikar Abbany

Related Subjects Sci-Tech, Technology

Keywords Square, IPO, initial public offering, New York Stock Exchange, mobile payments, technology, tech bubble

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Ferrari floors it at Wall

Street debut 21.10.2015

The iconic sports car maker has

roared onto the New York Stock 

Exchange. The RACE stock got off 

to a strong start on its first day of 

trading, ending firmly above the

opening price and raising nearly $1

 billion.

Fitbit makes strong market

debut on NYSE 18.06.2015

Shares of Fitbit have surged more

than 50 percent in the first day of 

trading at the New York Stock 

Exchange (NYSE). The maker of 

 wearable activity trackers recently 

reported impressive business

figures.

 Alibaba increases IPO price

range 16.09.2014

Chinese online retail giant Alibaba

has increased the price range for its

upcoming flotation on Wall Street.

The revised price would value the

Chinese market leader at roughly 

$25 billion, far more than

Facebook in 2012.

R E LA TE D C O N TE N T

 week, it has now announced gross procee ds of close to a billion do llars from t he share issue. (26.10.2015)

Chinese IPOs suspended to stop stock market slide

Efforts have been stepped up in China to stabilize the country's free-falling stock markets. Among other things,

initial public offerings have been delayed and a stabilization fund has been set up. (05.07.2015)

Fitbit makes strong market debut on NYSE

Shares of Fitbit have surged more than 50 percent in the first day of trading at the New York Stock Exchange

(NYSE). The maker of wearable activity trackers recently reported impressive business figures. (18.06.2015)

WWW LINKS

Fortune's Unicorns List