Can someone help explain what this means? Is there something about Square that we can attribute this to? Did they make a mistake? Were they overvalued to begin with?
I've spent the last year trying to understand the whole private-to-public process and I'm curious what this means for Square and other companies like Etsy who are experiencing the same drop in stock price.
They've made some questionable business decisions to spur growth and are being called to task. They haven't seemed to be able to grow effectively without deals like that, and the sector is becoming crowded.
That deal has been heavily touted as a terrible deal for square for years. As such was priced into the IPO price as well as the current valuation. That is basically the only bad deal you can point to that they are in.
For pretty much no reason, a bunch of players in FinTech that are sometimes lumped in with Square (since Square has a financing product) plummeted on the markets starting a week ago. Lending Club, OnDeck, Lending Tree, etc.
I don't think Square was overvalued at IPO. As for today's drop: the fall in oil has hit everyone, unfortunately Square's fall of around 8% is worse than most. For Example today AMZN saw a drop of around 4% and TSLA is down 5.5%.
I'm not an economist, but my understanding is that the price of oil does not directly impact the valuation of these companies, per se, but that growth-oriented companies (especially) and oil sales depend on a strong global economy.
When the price of oil falls, that indicates that people are pulling back on oil/gas/etc purchases due to constrained budgets, reduced business/operations, etc. (and/or that people buying the oil predict that others will cut back on those things in the near future)
It's probably not just oil, but rather a general reduction of risk from investors. People are worried about the global economic climate and are pulling their money out of stocks and putting it into more predictable, dependable assets like gold and treasury bonds, which tend to have much lower yields but also much less risk of tanking in value during bad times.
Someone with a little more knowledge of financial markets, help me out here. Is it really news if a tech company's stock drops 8-10% on a day when NASDAQ is down over 3%?
Not really. Tech stocks are more volatile because more of their value (compared to someone like GE or P&G) is based on hypothetical growth projections- revenue and profit. Any market news can swing these stocks wildly- up or down. Hortonworks HDP dropped 35% y'day just because they decided to raise more money $100M and investors felt that something is wrong.
Mostly if we're discussing how equity compensation might not be the best option. Or how preferred investors and founders took what they could from the workers (in response to "refragmentation").
The Square IPO was less than employees who started after their last round and preferences made it even worse, meaning even though there is a liquidity event, employees who took options are out. With this significant drop, other employees who exercised their options (and paid taxes) are also out.
> With Square, investors were guaranteed a 20 percent premium on their investment, which would be worth $18.56 a share, meaning Square had to issue more shares to those investors, further devaluing the stock owned by employees.
Well, the NASDAQ[0] and DJIA[1] are both off 3% for the day right now, along with every other index around the world. Or, to talk about price movements that are probably a bit more noteworthy, crude oil futures on NYMEX[2] are down ~7%.
It's been kind of a (minor) bloodbath so far in the markets today. So, a 10% drop for a young, growth-oriented company is not terribly surprising on a day like today, I'd think.
Well, for some people, myself included, the not-going-so-well recent IPOs (Square, Box, etc.) would help deflate the pressure on housing prices in SF/BA. I feel for the workers at these company, but it's becoming impossible to raise a family here when the rent/mortgage is creeping up to more than half of most people's salary.
Ha, yes. I don't own a home, but I would like to someday, so I'm always confused how news about falling home prices is treated as "bad" in general in the media. For me, I celebrate the news. I want housing prices to go kaboom so I can afford one.
Especially so for an investment like housing, where rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would.
Sorry for the barb, but that meme (your house as an investment) really bothers me, because it has the potential to do a lot of damage. It's like penny stocks. Sure you can make money if you really know what you're doing or get lucky, but by and large the idea that it's a good investment originates with people who've a financial interest in convincing you to buy some.
>rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would
Pretty shortsighted view there, and demonstrably wrong. Historically housing prices have always risen faster than the rate of inflation - both in 'popular'neighborhoods and elsewhere. Take almost any 10 year period of time and you'd be very very hard pressed to find a region where housing prices didn't dramatically outpace inflation.
Is this true in all countries, or just the ones (like my country, the USA) where the real estate market is rigged by various government/incumbent entities?
Yes, but if you're looking at them as an investment then you need to look at the overall picture. Just looking at prices over time is interesting, but it doesn't give the financial picture from the perspective of a homeowner because it ignores taxes, maintenance and repairs. Once all that's factored in the picture tends to get a lot less rosy.
For example, over the past 25 years the average price of a US home has grown by about 14% in real terms. I'm too lazy to calculate out what that would be as an annual percentage rate, but it's definitely lower than the average US property tax rate, which I believe is a smidge under 1%. So already, even without considering other expenses, houses tend to be gradual money losers on average.
This doesn't seem like a "simple fact", rather insanity that has caused many of the economical problems we have seen recently.
I don't buy a house expecting to use it 10+ years and still make a buck selling it afterwards. The same way I don't buy a car and expect it to yield me money when it's a broken beater, in fact, the simple fact of buying it immediately devalues it (to others).
(I guess this is because (1) the market and tax situation in the US are broken and (2) it causes the land to be vastly more valuable than whatever is standing on top of it)
The larger point was that incentives flip as soon as you become a homeowner. As a renter, you are hoping for housing prices to go down and would like to see this happen via increased housing supply, deregulation, or even a local economic downturn as someone suggested above. But as soon as you become a homeowner, you want housing prices to level or increase because a large portion of your net worth is tied to it. So you suddenly want new housing supply to shrink, increased developmental regulations, and a booming economy in your area.
A house is more than just an investment, though. It's, you know, the place you live. The catchment area for the schools your kids go to. The hospitals you have access to. And so on.
This is hugely important for "normal" people. Most people have care a lot more about the value of their house not going down than not going up. Breaking even on a house is find because it provides roof over your head.
Eventually. I'd personally love it is my house stopped increasing in value so I can pay lower property taxes. My value went up over $100k in the first year after I bought it.
The problem with that though is that housing prices are tightly tied to surrounding economic factors. You could go to some crappy neighborhood in a depressed area of the USA and get a great house for "nothing" (relative to, say, CA). If housing prices go kaboom, it's likely because there aren't as many people moving there, and people aren't moving there because there aren't jobs that can support people.
And be careful what you wish for, because once you do own that house, if the prices continue to fall, you could be underwater fairly easily. If a $1m place falls to $750k, which you can afford, but then the economy continues to stutter, it could fall to $500k or $350k. Remember that your mortgage doesn't reflect what you could sell your house for, once you sign the papers, you're on the hook for it.
> The problem with that though is that housing prices are tightly tied to surrounding economic factors
I really question what those economic factors are though. For SF it's clearly the availability of high paying jobs. However in Portland, OR (where I live) there are little to no high paying tech jobs available, and yet the housing prices are sky rocketing to levels never seen before.
Given my basic understanding of economics the current climate makes absolutely no sense. Wages have been stagnate for years, college grads have no career outlook (outstanding student debt is now $1.2 trillion), and prices for everything (except for oil) are higher than ever. I've seen friends empty their bank accounts just to pay rent. The concept of savings or retirement for millennial might as well not even exist.
> The concept of savings or retirement for millennial might as well not even exist.
Probably not a popular view, but I think there's some truth to it. Check out the Harvard JCHS article [1], more households are paying 30, 40, and even 50% of their salaries for rent than ever before.
Major shifts like this can only be explained by culture, IMO. Maybe the US is undergoing a major shift toward wanting to live in city centers, even at the cost of saving for the future? Or people in certain metros just think they're that exceptional / special / etc. that they "deserve" to live in a certain place? Or everyone in a high-ambition career think they don't need to save because they'll "make it" (maybe true?) and will have fuck-you money in a few years?
Tangentially, the cost of paying a mortgage is comparable to or cheaper than paying rent in the metro areas I've priced. The problem is getting enough of a % downpayment saved to "unlock" the house purchase option.
People I've known who bought houses look at it as locking a "rent rate" in for 30 years and assuming the burden of maintenance rather than riding the fluctuating markets. Right now, they're locked in at lower rates than other people I know are paying in rent to live in a similar area.
I willing to wager part of the problem is the lockdown on lending after 07/08 and more people got pushed into the rent market because they couldn't get the loans to purchase a house which has led to the inversion of the cost of owning vs renting. Historically, owning has been more expensive than renting in most places
You buy the neighborhood with the price of a home (in theory). Invested neighbors keep appearances up, elect good leaders, push for better schools etc. Once the value starts dropping, none of that is necessarily a given. In my area once gorgeous suburbs became gang centers just a decade or two later. Not exactly a great thing given the recommended home stay for a starter home is about 5-7 years in order for you to "make your money back" should it even go up.
Not to mention a lot of consumers view home ownership as the single largest investment they make, so they are sitting on their retirement.
This is a given and has already happened twice in the past 20 years. Housing is in a bubble in the Bay area yet again and history always finds a way to repeat itself. I do think we've learned some and that the economy is stronger now than the previous two crashes, but a 15-30% drop across the board seems reasonable.
My wife and I have put in more than 20 unsuccessful offers attempting to stay in our unfortunately popular neighborhood in the last two years. We have been chasing the affordability train for some years now, our increasing bids never getting ahead of the frenzy... (today, it seems we're at peak market and it'd be foolhardy to buy perhaps...)
NB: we don't just 'move further out' not only because of 20 years of community, our love of bike commuting, and our great 'hood...
...we are bound by the location of our excellent public school. Non-parents may not realize the staggering import of lucking into a K8 public school you truly love... for two siblings in SF, staying in our school instead of paying for some private (assuming we could get into one) will amounts to well over half a million dollars in post-tax income over the next decade...
We too are part of the tired story of 'middle' class (by SF standards... :P) professional families with 2x full time incomes finding it almost impossible to hold on to a life of modest middle class comfort in SF (where middle class means: a 1000 sq ft 2 bedroom home for family of four; one 25K car; public schools; etc.)
in my opinion, you're not really competing with those people, the real money that moves those markets comes from overseas. the local tech people just rent from the real owners.
with a global equities slump more foreign money might pour into california real estate.
Yeah, the way that the public school district system happens to interacts with housing markets is a remarkably powerful way of impeding class mobility. If your family already has a home in a well-funded school district, or if you can afford to move there, you can do very high return-on-investment things for your children. (Or, as you mentioned, if you can afford a private school.) And moving your home is a market with very long timescales.
Note that I am not saying that the school district system is somehow intrinsically morally bad, or that I know of a better alternative to it, just that it has this unfortunate result if you think class mobility is a good thing.
It'll be easy to find a cheap place in Morgan Hill! SF/Peninsula, not so much. Prices never really went down by that much in '08 which was a real, honest-to-god housing crisis.. so a smaller tech deflation won't help much.
.. Or so I hope, since I just bought an overpriced Peninsula house last year :)
Sorry to tell that but no, it will not really help with raising a family here. Sadly current prices are new normal and deflated pressure will just let them to not grow further up in near future. (5%-10% drop is nothing for affordability). On another hand looking at what it became I don't even feel sorry for it's future. SF is over and to hell with it. Just a whole bunch of douches.
The real douches are the millionaire homeowners who pushed for restrictive zoning laws for so many years. They've made their fortunes, at the cost of SF mostly only being affordable for the rich.
1) "millionaire homeowners" is pretty much definition of SF. And while roughly 1/3 of SF residents are renters big part of them are temporary here (boom and bust nature of this place, you can call them carpetbaggers) and are just douches who are not homeowners.
2) Doesn't matter who exactly are douches or who can afford SF. SF is ugly place and no victorians can help it. Bigger problem though is that rest of the country can be even uglier.
On the rent front, I doubt it -- salaries are just increasing to match.
All-cash comp in the 300-500k range is surprisingly common (at least for 10+ year experience people in hot fields); add any luck on equity, and 2 incomes, and you can afford SF rents as they stand.
Being able to reliably get a $300k/yr cash salary (salary+bonus, but still cash) seems more related to absurd rents than 10% of people getting huge equity payouts (which tend to not even be that huge). I also think a lot of people who get $1-5mm equity windfalls often think "oh, buy a house somewhere else" vs. "a small condo in SF".
(equity does affect the buy market; if there were a rate hike and China implosion at the same time, but people still had equity money, they'd probably be the majority of buyers.)
Median household income in SF is 77k, just FYI. Only 16% of SF households make over $200k (this includes 2 earner households, which is probably most of these). This doesn't negate anything in your comment, just adds a little bit.
Conversely, if the overall market is doing poorly (which it is), you'll get hit in your 401k/pension fund/retirement account. To which degree falling housing prices and falling savings funds would cancel each other out, I do not know. If it were just Box and Square that were doing poorly, you would be fine - these recent IPOs have relatively low institutional holdings as a % of total. Twitter, Facebook, Yahoo on the other hand - upwards of 60% of the stock is owned by institutional investors, AKA your retirement fund and Vanguard ETFs.
It already happened starting in December. House prices are down and competition has dropped. We'll see if this trend continues in January but my bet is that price houses will continue downward. The only problem is that interest rates continue to be low, so some people will always have the ability to outbid others.
Tech stocks and small cap stocks tend to have a pretty high beta too, so it's not super surprising that Square's price would exaggerate recent market movements.
To add more context to this -- the markets have been sliding since Sunday due to Chinese intervention in the markets (including raising RMB reserves for Chinese banks), and there is a lot of shakeup expected from the lifting of Iranian sanctions and the Saudi Aramco IPO internal debate (could be largest IPO in history and it would be company with the largest market cap in history, yes bigger than Apple's).
> it would be company with the largest market cap in history, yes bigger than Apple
Apple is not remotely the largest company in history, when adjusted for inflation. The The Dutch East India Company, for instance, was worth over 7 trillion dollars at one point. Likewise, Standard Oil held a monopoly on all the USA's oil at one point and certainly had a several trillion dollar valuation.
Saudi Aramco will be massive, certainly. But not without precedent in history.
There was an article in The Guardian this past weekend about Saudi Aramco which estimated it's value at $10tn, which would definitely put it in a league of it's own when it comes to total value.
All the food trucks, street and market vendors, estate and yard sales, handymen, etc I see accept credit cards using Square. If they figure out how to hang on to this market and grow as these little vendors grow then they're in good shape. Being down 10% when the Dow is down 400+ points for days on is not unusual.
The big question is - who is Square competing with.
> If they figure out how to hang on to this market and grow as these little vendors grow then they're in good shape.
Now that Square is a public company with shareholders, the Silicon Valley mantra of growth-at-all-costs no longer generally applies, instead the focus is on profitability/ROI. Which is something that Square lacks, and is in an industry with slim margins already.
I've only ever seen three of those in my entire life, they're all locked in a cabinet behind me gathering dust. On the other hand I paid for something with Square just yesterday and as my card was being swiped the lady said "We're excited because we're suppose to get the new Chip reader from Square next week."
This reminds me of Peter Thiel's thoughts on monopolies.
Square are in competition with every payment method of every kind. They are not in some tiny "niche" category of payment that will somehow remain invulnerable to competition from banks, Apple Pay, Android Pay, Stripe, etc. etc.
I don't see how they can possibly survive in the long-term.
There market cap is ~3 Billion which generally suggests a fairly large company. If managed well they can probably grow 10x over the next decade, but that may already be factored into there stock price.
i live in manhattan and see a lot of vendors (though not usually food) accept payments through hardware that is not square. same technology, just not square
If the tech bubble bursts I'm not sure who is going to be buying the $15, undersized lunches that the new wave of food trucks is flooding the market with.
It's the opposite surely. Some of the companies and concepts that seem to survive in SF are considered barmey in other wealthy western cities. Startups whose customers are other startups..
Itself. It is deploying tons of resources on non-core activities like scheduling & food delivery. All the ceding online payments to Stripe, being last to release an Apple Pay terminal and having almost no international business.
> "The big question is - who is Square competing with."
Anecdotally, tons of other people. Looking at the coffee shops and smaller stores in my area there's a pretty wide array of iPad-POS systems in use that aren't Square. In fact where I am (NYC) I'd wager that Square holds a plurality of that market rather than the majority.
Most of their frontends (in so far as I have to interact with them as a customer) aren't quite as slick as Square's, but they do get the job done, and presumably vendors use them because they're cheaper, which only underscores how fragile Square's business is.
These third party solutions aren't as sexy or slick as Square, but ultimately when it comes to payment processing sexiness is very, very far down the list of priorities.
It's also worth noting that there are big juggernauts moving in on Square's territory of physical transactions - PayPal being one - who already run enormous electronic payment volume. Stripe also has a big piece of the electronic payments pie and can potentially move in on Square's territory, while Square has so far been unable to branch out beyond physical payments.
Exactly my thoughts. In fact I can't remember the last time I saw a restaurant, coffeeshop, or food truck NOT using Square. If Square went belly up those vendors may have to forfeit accepting credit cards. I've not seen a more affordable competitor.
I've even seen these things being sold at Walmart and other supermarkets. I go to craft shows and see normal people accepting credit cards to sell their knitting and their quilts. It's really opened a whole new market. I can't imagine them going under, what life would be like after that.
They are competing with the big unseen giants like First Data (https://en.wikipedia.org/wiki/First_Data) who owns clover. Square has a small part of the pie. They may be used by food trucks, small vendors, and people at the local farmers market but where the real money is coming in there are established players already.
Everything is down. This is almost certainly related to macro signals and not Square itself. Smaller cap stocks tend to have higher volatility and will normally take a heavier beating than larger cap ones.
That's not an answer. There are too many reasons someone would need to post within 24 hours of creating an account. For example, someone creates a blog post that gets posted to HN by someone else and they enter the comments to answer some questions, while the discussion is still going on.
Or scenarios where throwaways are warranted to prevent leakage of personal info. I think flagging/downvoting worked well here considering the post is an hr old.
They're not truly deleted, because you can read them if you turn 'showdead' on in your profile. There is such a thing as deletion too, but only a comment's author can do it, and only for the first two hours.
The positive uses of new accounts (described by foldor and myth_buster) add more value than the negative ones destroy. Being open to trolls is annoying, but it's a price worth paying for having an open forum. It's particularly valuable when a knowledgeable person—often the creator of a project or the author of an article—is inspired to make an account and comment on the story they know about.
For what it's worth, I agree with this. Was it Fark that used to limit posts by new accounts? Someone I knew got written about on Fark and wanted to respond but couldn't because he didn't previously have an account, and as a new account couldn't add comments.
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[ 5.2 ms ] story [ 164 ms ] threadI've spent the last year trying to understand the whole private-to-public process and I'm curious what this means for Square and other companies like Etsy who are experiencing the same drop in stock price.
Other remarkable tidbit: Shell now has a smaller marketcap than Unilever.
Here's one example: http://money.cnn.com/2015/10/15/technology/square-starbucks/
Don't be wary ;)
When the price of oil falls, that indicates that people are pulling back on oil/gas/etc purchases due to constrained budgets, reduced business/operations, etc. (and/or that people buying the oil predict that others will cut back on those things in the near future)
The Square IPO was less than employees who started after their last round and preferences made it even worse, meaning even though there is a liquidity event, employees who took options are out. With this significant drop, other employees who exercised their options (and paid taxes) are also out.
http://www.bloomberg.com/news/articles/2015-11-19/square-emp...
It's been kind of a (minor) bloodbath so far in the markets today. So, a 10% drop for a young, growth-oriented company is not terribly surprising on a day like today, I'd think.
0: https://www.google.com/finance?cid=13756934
1: https://www.google.com/finance?q=INDEXDJX%3A.DJI
2: http://www.marketwatch.com/investing/future/clg6
Sorry for the barb, but that meme (your house as an investment) really bothers me, because it has the potential to do a lot of damage. It's like penny stocks. Sure you can make money if you really know what you're doing or get lucky, but by and large the idea that it's a good investment originates with people who've a financial interest in convincing you to buy some.
Pretty shortsighted view there, and demonstrably wrong. Historically housing prices have always risen faster than the rate of inflation - both in 'popular'neighborhoods and elsewhere. Take almost any 10 year period of time and you'd be very very hard pressed to find a region where housing prices didn't dramatically outpace inflation.
For example, over the past 25 years the average price of a US home has grown by about 14% in real terms. I'm too lazy to calculate out what that would be as an annual percentage rate, but it's definitely lower than the average US property tax rate, which I believe is a smidge under 1%. So already, even without considering other expenses, houses tend to be gradual money losers on average.
I don't buy a house expecting to use it 10+ years and still make a buck selling it afterwards. The same way I don't buy a car and expect it to yield me money when it's a broken beater, in fact, the simple fact of buying it immediately devalues it (to others).
(I guess this is because (1) the market and tax situation in the US are broken and (2) it causes the land to be vastly more valuable than whatever is standing on top of it)
And be careful what you wish for, because once you do own that house, if the prices continue to fall, you could be underwater fairly easily. If a $1m place falls to $750k, which you can afford, but then the economy continues to stutter, it could fall to $500k or $350k. Remember that your mortgage doesn't reflect what you could sell your house for, once you sign the papers, you're on the hook for it.
I really question what those economic factors are though. For SF it's clearly the availability of high paying jobs. However in Portland, OR (where I live) there are little to no high paying tech jobs available, and yet the housing prices are sky rocketing to levels never seen before.
Given my basic understanding of economics the current climate makes absolutely no sense. Wages have been stagnate for years, college grads have no career outlook (outstanding student debt is now $1.2 trillion), and prices for everything (except for oil) are higher than ever. I've seen friends empty their bank accounts just to pay rent. The concept of savings or retirement for millennial might as well not even exist.
Probably not a popular view, but I think there's some truth to it. Check out the Harvard JCHS article [1], more households are paying 30, 40, and even 50% of their salaries for rent than ever before.
Major shifts like this can only be explained by culture, IMO. Maybe the US is undergoing a major shift toward wanting to live in city centers, even at the cost of saving for the future? Or people in certain metros just think they're that exceptional / special / etc. that they "deserve" to live in a certain place? Or everyone in a high-ambition career think they don't need to save because they'll "make it" (maybe true?) and will have fuck-you money in a few years?
It's a big change from the past, that's for sure.
[1] http://www.jchs.harvard.edu/research/publications/projecting...
People I've known who bought houses look at it as locking a "rent rate" in for 30 years and assuming the burden of maintenance rather than riding the fluctuating markets. Right now, they're locked in at lower rates than other people I know are paying in rent to live in a similar area.
I willing to wager part of the problem is the lockdown on lending after 07/08 and more people got pushed into the rent market because they couldn't get the loans to purchase a house which has led to the inversion of the cost of owning vs renting. Historically, owning has been more expensive than renting in most places
Not to mention a lot of consumers view home ownership as the single largest investment they make, so they are sitting on their retirement.
My wife and I have put in more than 20 unsuccessful offers attempting to stay in our unfortunately popular neighborhood in the last two years. We have been chasing the affordability train for some years now, our increasing bids never getting ahead of the frenzy... (today, it seems we're at peak market and it'd be foolhardy to buy perhaps...)
NB: we don't just 'move further out' not only because of 20 years of community, our love of bike commuting, and our great 'hood...
...we are bound by the location of our excellent public school. Non-parents may not realize the staggering import of lucking into a K8 public school you truly love... for two siblings in SF, staying in our school instead of paying for some private (assuming we could get into one) will amounts to well over half a million dollars in post-tax income over the next decade...
We too are part of the tired story of 'middle' class (by SF standards... :P) professional families with 2x full time incomes finding it almost impossible to hold on to a life of modest middle class comfort in SF (where middle class means: a 1000 sq ft 2 bedroom home for family of four; one 25K car; public schools; etc.)
with a global equities slump more foreign money might pour into california real estate.
Note that I am not saying that the school district system is somehow intrinsically morally bad, or that I know of a better alternative to it, just that it has this unfortunate result if you think class mobility is a good thing.
.. Or so I hope, since I just bought an overpriced Peninsula house last year :)
Present is ugly.
All-cash comp in the 300-500k range is surprisingly common (at least for 10+ year experience people in hot fields); add any luck on equity, and 2 incomes, and you can afford SF rents as they stand.
Being able to reliably get a $300k/yr cash salary (salary+bonus, but still cash) seems more related to absurd rents than 10% of people getting huge equity payouts (which tend to not even be that huge). I also think a lot of people who get $1-5mm equity windfalls often think "oh, buy a house somewhere else" vs. "a small condo in SF".
(equity does affect the buy market; if there were a rate hike and China implosion at the same time, but people still had equity money, they'd probably be the majority of buyers.)
https://www.washingtonpost.com/news/business/wp/2016/01/20/n...
The environment should stabilize by 2016Q2.
Apple is not remotely the largest company in history, when adjusted for inflation. The The Dutch East India Company, for instance, was worth over 7 trillion dollars at one point. Likewise, Standard Oil held a monopoly on all the USA's oil at one point and certainly had a several trillion dollar valuation.
Saudi Aramco will be massive, certainly. But not without precedent in history.
Saudi Aramco – the $10tn mystery at the heart of the Gulf state - http://www.theguardian.com/business/2016/jan/16/saudi-aramco...
Don't hold your breath.
The big question is - who is Square competing with.
Now that Square is a public company with shareholders, the Silicon Valley mantra of growth-at-all-costs no longer generally applies, instead the focus is on profitability/ROI. Which is something that Square lacks, and is in an industry with slim margins already.
https://www.paypal.com/webapps/mpp/credit-card-reader
This reminds me of Peter Thiel's thoughts on monopolies.
Square are in competition with every payment method of every kind. They are not in some tiny "niche" category of payment that will somehow remain invulnerable to competition from banks, Apple Pay, Android Pay, Stripe, etc. etc.
I don't see how they can possibly survive in the long-term.
I'm sure you can build a great business in that market, but is it a 3 billion dollar business?
There's a bunch internationally where Square hasn't really begun to compete.
Anecdotally, tons of other people. Looking at the coffee shops and smaller stores in my area there's a pretty wide array of iPad-POS systems in use that aren't Square. In fact where I am (NYC) I'd wager that Square holds a plurality of that market rather than the majority.
Most of their frontends (in so far as I have to interact with them as a customer) aren't quite as slick as Square's, but they do get the job done, and presumably vendors use them because they're cheaper, which only underscores how fragile Square's business is.
These third party solutions aren't as sexy or slick as Square, but ultimately when it comes to payment processing sexiness is very, very far down the list of priorities.
It's also worth noting that there are big juggernauts moving in on Square's territory of physical transactions - PayPal being one - who already run enormous electronic payment volume. Stripe also has a big piece of the electronic payments pie and can potentially move in on Square's territory, while Square has so far been unable to branch out beyond physical payments.
Not to say that a 10% drop isn't notable, but the whole market is taking a beating today.
https://www.google.com/finance?q=NYSE%3ASHOP
It's not doing too poorly today, but it's not been immune to the larger macro trends of the last month.
Whole market is going nuts over the possibility of $10/barrel oil and overly strong US dollar
In other words, as you read this, unicorn valuations are getting less "unicorny," so to speak.
Some of it is correction, but I think generally more people are starting to treat it as a hedge against general global markets--as a haven like gold.
They're not truly deleted, because you can read them if you turn 'showdead' on in your profile. There is such a thing as deletion too, but only a comment's author can do it, and only for the first two hours.
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