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Earlier today payments company Square went public on the New York Stock Exchange at $11.20 a share, and its CEO Jack Dorsey’s net worth dropped almost $800 million. Forbes reports that even opening higher than expected has still decreased Square's valuation. Square was priced at $9 per share as of Wednesday, but it opened within the higher price range set in early November.
Dorsey has three-quarters of his wealth connected to Square and the rest of it tied to Twitter, where he is also CEO. Now, if valued on the high end of a $11 to $13 range, Square is worth $4.2 billion, not $6 billion (the number of its last private valuation.)
Square started in 2009 and offers free software app and a small card reader you can plug into your phone or tablet. Their revenue comes from getting a cut of transaction volumes through people who use the app to sell things. Since 2012, Starbucks has been an important part of Square's business. The two companies made a deal where Square would process credit and debit card payments at all U.S. Starbucks stores. But PCMag says that in August that deal was changed so Starbucks can use other payment options.
Despite their widespread use (mostly in the U.S., but to a lesser extent in Canada and Japan), Square hasn’t found profitable success. Last year Square’s total revenue was $850 million, but they had a net loss of $154 million. As of the end of this September, Square’s revenue is around $893 million, but they’ve had a net loss of $132 million.