Will Square IPO Price Below Range?

Electronic payment start-up Square Inc. is scheduled to price its initial public offering (IPO) later Wednesday afternoon, and the word on the Street is that the company is telling investors that the offering may price at or below the expected range of $11 to $13 a share.

According to Dealreporter, a second source said the deal is at risk of pricing at the low end of or below the range. Neither would be particularly happy news for the company.

Square aimed to raise up to $351 million at the high end of its IPO range by selling 27 million shares. The share offering is oversubscribed according to the company, but pricing remains an issue.

The company is one of the tech sector’s latest unicorns with a valuation of some $4.2 billion even though it does not turn a profit and its CEO, Jack Dorsey, is also the CEO of Twitter Inc. (NYSE: TWTR). Square’s IPO filing goes so far as to admit that it may not even make a profit much less maintain one. But as an early and established player in a market that may top $140 billion in volume by 2019, Square may be well-positioned for patient investors.

Square has adopted a dual-class stock plan, where both Class A and Class B stock are worth an equal amount but Class B stockholders are entitled to 10 votes per share compared with one vote per share for Class A stockholders. Class B stockholders will hold about 99% of the voting power in Square after the IPO is completed.

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