Square Is Talking To Investors About A New Round At $5 Billion Valuation - But What About IPO Plans?
Jay Yarow/Business Insider
Lessin and Newcomer say the company would use the money to buy stock from some of its employees.
The news may signal a change in plans for Square.
In November, The Wall Street Journal's Douglas MacMillan reported that Square was talking with Goldman Sachs and Morgan Stanley about a 2014 IPO.
MacMillan said Square's 2014 revenues could approach $1 billion, up from $550 million this year.
It's possible that Square could do a final late stage round in the next couple months and an IPO in 2014.
But again, Lessin and Newcomer say the point of the $5 billion round would be to allow insiders to sell their stock.
Why would insiders want to do that instead of waiting for an IPO?
They wouldn't - unless they think there's a chance Square might IPO at a valuation less than $5 billion.
So what's going on?
Don't know! But let's speculate.
Maybe Dorsey suddenly doesn't feel like Square is ready for an IPO.
Maybe Dorsey took a look at taking Square public and decided no thanks.
The only reason for a company to go public is to get employees and investors liquidity and to have liquid stock to use for acquisitions.
Otherwise, being public is a big pain. You have to spend a lot of your time kissing-up to big shareholders who control your fate - shareholders who have your number on speed-dial.
This $5 billion round would take of liquidity for Square. And maybe Dorsey doesn't feel like Square has any big acquisitions ahead of it. So why go public ever?
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
- Experts warn of rising temperatures in Bengaluru as Phase 2 of Lok Sabha elections draws near
- Axis Bank posts net profit of ₹7,129 cr in March quarter
- 7 Best tourist places to visit in Rishikesh in 2024
- From underdog to Bill Gates-sponsored superfood: Have millets finally managed to make a comeback?
- 7 Things to do on your next trip to Rishikesh