BlackRock, Inc. BLK, one of the world’s largest asset managers, acquired at least a 5% ownership stake in Square Inc. SQ, according to a filing with the Securities and Exchange Commission (“SEC”). Square is a mobile payments company founded and run by Twitter TWTR CEO Jack Dorsey, which went public in November 2015.
Per the filing, BlackRock holds around 2.8 million shares of Square. At its IPO pricing, Square was valued at $2.9 billion as it settled for an IPO price of $9 per share, well below its original $11–$13 range. The public payments technology company’s current market capitalization is about $3.7 billion.
Square offers payments software and credit card reader along with selling business services. Also, the company provides additional features to merchants like invoicing, payroll, cash advances, appointment scheduling and marketing features.
Since it was founded in 2009, Square has made its foray into the public consciousness, riding the mobile payments wave along with Apple’s AAPL Apple Pay and Samsung Electronics’ Samsung Pay, among others.
However, the company reported a loss of $131.5 million in the first nine months of 2015. This has already surpassed a loss of $117 million in 2014, despite revenues rising 49%.
Nonetheless, BlackRock’s investment in Square reflects that despite uncertainty regarding the payments industry’s profitability as well as possibilities of slowing revenue growth in the face of intense competition, the investment manager considers Square an attractive opportunity for long-term growth.
Currently, BlackRock carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment