Square Has Confidentially Filed for IPO, Report Says

SAN FRANCISCO (San Jose Mercury News/TNS) —

Square, the mobile-payments company founded by tech entrepreneur and CEO Jack Dorsey, has filed confidentially for an initial public offering, Bloomberg News reported Friday, citing people with knowledge of the matter.

In addition, CNBC reported that Goldman Sachs, from whom Square has raised millions in debt financing, is leading the IPO.

Rumors of an IPO have surrounded the San Francisco company for years, but analysts have said Square’s worrisome financial condition has caused the delay of a public offering. One analyst told the San Jose Mercury News last month that Square’s financials were “horrific.”

Nevertheless, it would appear that the company is finally ready to make the Wall Street plunge.

The timing of an IPO is unknown — Dorsey is currently running not only Square, but also Twitter, which he co-founded and took over as interim CEO last month after Dick Costolo stepped down. Twitter’s board of directors is searching for a permanent CEO, and some tech-industry experts have speculated — and Dorsey has not denied — that he wants the Twitter gig permanently. Dorsey, 38, is now splitting his time between two multi-billion-dollar companies.

Forbes reported last month that Square was preparing to file for an IPO and would begin trading this year, citing unnamed sources.

Square makes card readers to process payments on mobile devices, as well as a host of payment-processing and money-management hardware and software for small businesses. It has recently expanded into other offerings, such as small-business loans, in an effort to diversify its income.

Under the Jumpstart Our Business Startups Act, companies with less than $1 billion in revenue can file confidentially for an IPO with the Securities and Exchange Commission and test investor appetite while keeping its financial and operating details hidden from the public. A confidential filing does not suggest when, or even if, Square might begin trading. The company could delay for months or even pull its filing if it believes it won’t get the valuation it wants in the public market.

Square has raised about $500 million from investors and has a valuation of $6 billion, according to Dow Jones data.

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