Today: San Francisco-based Square, a mobile payments provider, was going through its final day as a private company, as it readied an initial public offering. Also: Fairchild Semiconductor gets bought, and GoPro shares fall on dismal holiday outlook.
The lead: Square IPO could prove or disprove tech bubble
San Francisco-based Square, the mobile payments provider, was going through its final day as a private company as it readied an initial public offering of its stock whose success — or lack thereof — could shed some light on the possible existence of a tech bubble.
Square was scheduled to price its initial public offering sometime Wednesday night. Trading was due to begin on Thursday.
The IPO was expected to be priced at between $11 to $13 a share.
Square’s proposed price raised eyebrows because the midpoint of the offering, $12 a share, would be about 22 percent below the estimated price of $15.46 at which Square has been selling its shares from 2014 onwards.
What’s more, Silicon Valley is eyeing the IPO carefully because its reception on Wall Street could provide clues about whether the tech sector is in a valuation bubble.
Square offers point-of-sale software. It also offers a system called Square Register that handles digital receipts, inventory and sales reports. The Square system also provides analytics and feedback.
Revenue is increasing sharply, but red ink is also on the rise.
For calendar year 2014, Square produced $850.2 million in revenue, up 84.2 percent from calendar 2013, the SEC filing shows. Over the one-year period that ended in September, Square produced $1.14 billion in revenue.
During 2013, Square’s losses totaled 104.5 million in 2013, $154.1 million in 2014 and $168.6 million for the 12 months that ended in September.
Square intends to use SQ as its ticker symbol.
SV150 market report: Fairchild agrees to sell itself for $2.4 billion, AMD jumps
San Jose-based Fairchild Semiconductor agreed to sell itself to Arizona-based ON Semiconductor in an all-cash deal valued at $2.4 billion. ON would pay $20 a share for Fairchild. The deal would create a new leader in the power semiconductor market, and is the latest in a string of consolidations of the semiconductor industry. Fairchild soared 8.5 percent.
Sunnyvale-based Advanced Micro Devices jumped 7.1 percent, possibly on investor speculation about ongoing mergers and acquisitions in the semiconductor industry.
San Mateo-based GoPro plunged 5.1 percent after a forbidding outlook for holiday sales of the company’s primary product, a wearable camera. Piper Jaffray cut its price target to $15 a share for GoPro, down from a prior price target of $20. The company closed at $19.81 — about 17 percent below its IPO price of $24.
San Francisco-based Salesforce soared about 6 percent in after-hours trading following the company’s release of third-quarter results that topped Wall Street’s expectations. The cloud software company also offered a rosy view for revenue for next year. salesforce should deliver about $8 billion in revenue during 2016.
Silicon Valley Big 10: Gilead Sciences up 3.4 percent, Apple up 3.2 percent, Netflix up 3 percent, Facebook up 2.5 percent, Google owner Alphabet up 1.9 percent, Intel up 1.6 percent, Oracle up 1.5 percent, Cisco Systems up 1.2 percent, Adobe Systems up 1.1 percent, Salesforce up 0.1 percent.
Silicon Valley tech stocks
Up: The biggest winners by percent change were Fairchild Semiconductor, Advanced Micro Devices, SolarCity, Mattson Technology, Jive Software.
Down: The biggest losers by percent change were GoPro, Coupons.com, Zeltiq Aesthetics, Super Micro Computer, Equinix.
The SV150 index of Silicon Valley’s biggest companies: Up 27.46, or 1.63 percent, to 1,712.10.
The tech-focused Nasdaq composite index: Up 18.19, or 1.79 percent, to 5,075.20.
The blue chip Dow Jones industrial average: Up 247.66 , or 1.42 percent, to 17,737.16.
And the broad-based Standard & Poor’s 500 index: Up 33.14, or 1.62 percent, to 2,083.58.
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