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Report: Square IPO Could Launch in 2014

Bankers are already gearing up for a deal


Investment bankers reportedly are talking to Jack Dorsey — CEO and co-founder of mobile payments operator Square — about a possible initial public offering. The Square IPO would come sometime in 2014, according to the Wall Street Journal, which talked to a person familiar with the matter.

Should the Square IPO become reality, this would be Dorsey’s second hit — after all, he’s also the co-founder of Twitter (TWTR), in which he enjoys a roughly $1.5 billion equity position.

Dorsey launched Square in early 2009, which was a somewhat gutsy move amid a U.S. economy that was mired in the financial crisis.

Still, Dorsey saw a huge opportunity to leverage smartphones and tablets powered by Apple (AAPL) and Google (GOOG) Android to allow merchants to more easily take payments. And while building the company, he also set up an easy-to-understand fee structure.

As a result, Square has since gained tremendous traction. Some of its investors include marquee players like Visa (V), Sequoia Capital, Kleiner Perkins Caufield & Byers, Tiger Technology Global Management, Starbucks (SBUX) and Citigroup (C). In all, the company has raised $341 million.

Square has been aggressive with distribution deals. If you check out a local Starbucks, Apple Store or Best Buy (BBY) location, for example, you’ll seen packages for the service. And Square also has made major deals in other countries, including Japan, England and Canada.

For the most part, Square has been a disruptive force in the traditional payments space, which has been taking away market share from the likes of VeriFone (PAY) and others.

Square’s net revenues could total anywhere from $110 million to $165 million in 2013, according to the WSJ, and Dorsey reportedly has plans that could make the company profitable by 2015.

While the Square IPO discussions reportedly are in the early stages, firms like Goldman Sachs (GS) and Morgan Stanley (MS) appear to be the main candidates to lead the deal.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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