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Square Files for Initial Public Offering (IPO)

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Square, the mobile payment services company co-founded and headed by Jack Dorsey filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC).

Based on its Form S-1 filing, Square plans to raise a total of $275 million during its IPO and intends to trade its stock on the New York Stock Exchange (NYSE) under the ticker symbol SQ.

The company plans to use the proceeds from the public offering primarily for working capital and general corporate purposes. Square also intends to use a portion of the proceeds to acquire complementary businesses, technologies, or other assets. The company clarified that currently, it does not have any agreement or commitments with respect to any specific acquisition or investment.

Square shares will be made availabe under LOYAL3 Platform

The underwriters for the public offering include Goldman Sachs, Morgan Stanley, JP Morgan Chase, Barclays, Deutsche Bank Securities, Jefferies, RBC Capital Markets, Stifel and LOYAL3 Securities.

According to Square, the sale will be made available under a directed share program through a platform administered by LOYAL3 Securities. The shares that will be made available under the LOYAL3 Platform will be coming from its CEO, Mr. Dorsey and Start Small Foundation, the charitable organization he established.

Square financial performance

Based on the IPO filing, Square generated total revenue of $560.6 million for the six months ended June 30, 2015, an increase of 51% from the same period a year ago. The company posted net losses of $77.6 million for the six months ended June 30, 2015, and $79.4 million in the same period last year.

Square had pro forma cash and equivalents of $198 million as of June 30. It started using its credit facility and has taken $30 million—with $195 million remaining as of June.

“The strength of this business is more than the money it generates. As a public company our decisions will continue to reflect what we’ve done as a private one—we put our customers first. That constantly means, contantly asking the question: how can the financial system better serve people? We’ll measure ourselves by our commitment to take the long view and focus on building a company that creates value over decades and not just a few fiscal quarters out,” wrote Mr. Dorsey in the filing.

Mr. Dorsey said he gave back more than 15 million shares of 20% of his equity to both Square and Start Small Foundation over the past two years. His objective was to invest meaningfully in people who provide inspiration such artsts, musicians, and local businesses with a special focus on underserved communities.

He made a commitment to give additional 40 million shares or 10% of the company to invest in such cause. According to Mr. Dorsey, “I’d rather have a smaller part of something big than a bigger part of something small.” He is confident that Square has great potential to drive positive impact in his lifetime.

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