In an attempt to engineer a big post-offering pop, and avoid an infectious fizzle, Square (SQ) priced its shares, which will start trading Thursday, at $9 apiece. The $9 price is 18 percent below the low-end of the expected range and 42 percent below the $15.46 price at which Square last sold shares to private investors in a Series E last year.
And at $9 per share, or around $3.2 billion on a fully diluted basis for the company overall, Square is effectively priced at over $2 per share below its Series D round in 2012, the investors in which will be diluted by a ratchet in the Series E terms which valued the company at $6 billion and guaranteed a 20 percent gain upon going public
In related Jack Dorsey and local tech news, Twitter (TWTR) closed at $25.90 per share today, a dime below the price at which the company went public in 2013, and short interest in the company is at an all-time high (59 million shares).
UPDATE (11/19): With the engineered pop and desired headlines secured (“Square Soars!”), Square closed its first day of trading up 45 percent at $13.07 a share. On a fully diluted basis, the company is now valued at around $4.6 billion, down from $6 billion at the same time last year.
UPDATE (11/25): Square closed today at $11.90 per share, down 9 percent in its first week of trading with underwriter support. And the short interest in Twitter, which closed the day at $26.06 per share, up $0.16 per share (0.6 percent) over the past week, has increased to 61 million shares, an increase of 2.1 million shares over the past two weeks.