The valuations for Square’s and Match Group’s initial public offerings will be revealed soon, but it’s become clear that both are falling victim to the fading of the unicorn craze pertaining to tech IPOs. This same problem could keep Dropbox and other tech startups from IPOing anytime soon. For now anyway, it looks like Square and Match will be able to pull out offerings, although perhaps not at the valuations their respective management teams are hoping for.
And even though investors are no longer jiving with the sky-high valuations tech IPOs have had in recent years, both firms’ offerings are significantly oversubscribed.
Square IPO below range?
Dealreporter’s Jay Antenen and Antonita Madonna said today that their sources suggest Square’s IPO could be priced at or below the previously provided price range. Indeed, comparisons with PayPal make the competing payments processing firm look more expensive when looking at projections for 2017 adjusted revenue. Because of this fact, it seems likely that Square’s IPO will price in lower than the range of $11 to $13 per share.
Square is trying to sell 31.1 million shares in its IPO, which would give it a value of $3.9 billion at the midpoint or $5.7 billion if it manages to pull off the high end of the range. The order books for the offering closed today, and pricing will come tonight.
Some investors have questioned Square’s strategy of targeting merchants with low revenues even though it has posted strong growth. Twitter CEO Jack Dorsey is also CEO of Square despite concerns by some that he can’t run both companies at the same time.
Match Group IPO expected at midpoint
Dealreporter’s Jay Antenen and Antonita Madonna in sources also said their sources claim Match is expecting to price its offering at the midpoint of its range among “high quality investors.” IAC Interactive, the dating website’s parent company, is spinning it off through the IPO.
Match is trying to sell 33 million shares at a range of $12 to $14 per share, which gives it an enterprise valuation of around $4.4 billion at the midpoint with $1.3 billion in debt. The order book closed today, and pricing will occur tonight. Dealreporter’s sources said Match had already gotten the investors it wanted to secure on board and that the orders started going in after one-on-one meetings with selected investors.