
Square to Raise $100M at a $6B Valuation - dandrewsen
http://bits.blogs.nytimes.com/2014/09/12/square-to-raise-100-million-at-a-6-billion-valuation/?_php=true&_type=blogs&hpw&rref=technology&action=click&pgtype=Homepage&version=HpHedThumbWell&module=well-region&region=bottom-well&WT.nav=bottom-well&_r=0
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jgalt212
Common perception of Square is that it's unlikely they'll be able to live up
to original expectations. Jack Dorsey is no more the next Steve Jobs than
Grant Hill was the next Michael Jordan.[1] That being said, if people are
still willing to give them tons a cash it gives them the ammunition to make
another go at their Moon Shoot, by all means take the money.

So probably a good move for Square, and probably not the wisest use of cash
for the investors. That being said, it's tough to find a good home for cash
these days thanks to global QE.

As for me, given the choice between putting money in the 10Y notes at 2.6%
(pretty close to inflation over the last 30 years), Square, SP500 fund (19.69
PE or 5.1% yield) or putting it under you mattress, I'd opt for some mix of
the mattress and SP500 index fund.

[1] [http://www.complex.com/sports/2013/05/the-complete-
history-o...](http://www.complex.com/sports/2013/05/the-complete-history-of-
nba-players-being-called-the-next-mj/grant-hill)

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AVTizzle
>> "it's tough to find a good home for cash these days thanks to global QE."

Can anyone recommend a good "Explain It Like I'm 5" resource to describe
what's happening with qualitative easing and it's microeconomic effects for
the individual investor?

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madamepsychosis
[http://avc.com/2014/03/the-bubble-question/](http://avc.com/2014/03/the-
bubble-question/)

Fred Wilson explains it pretty well here.

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taytus
I can't be the only one who think that these valuations are insane right?

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bane
If you look at established companies that have reasonable valuations, and look
at what they do, it's completely insane.

There are large airlines, major oil companies, major media companies...at one
point I worked for the world's largest private R&D organization, who also
happened to manage most of the DOE National Lab system and is barely worth
this much.

The value these companies seem to have appears to have almost nothing to do
with their business fundamentals, and everything to do with how much somebody
is willing to pay for a pretty egg.

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fraserharris
Your analysis is incorrect because you are basing it on Price/Earnings,
whereas the market is pricing Square on Price/Earnings Growth. Square is
replacing hundreds of incumbent POS vendors & is growing quickly. Airlines,
oil companies, etc aren't generally growing that quickly.

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untog
_Square is replacing hundreds of incumbent POS vendors & is growing quickly_

Is it, though? I haven't seen many new POS terminals in a long time.

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ben1040
As in, you haven't seen old POS terminals replaced with new ones?

At least in the US, you're going to see lots of this happening in the next
year. Starting October 2015, the major card brands have dictated that
merchants will be liable for fraudulent transactions processed via the
magstripe (as opposed to EMV).

That means lots and lots of new terminals. Square's also got an EMV compliant
reader coming out soon.

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objclxt
> _Square 's also got an EMV compliant reader coming out soon._

Chip and signature though, not chip and PIN. I can't see anything from square
about the liability for chip and signature, but it's normally on the merchant,
not the bank.

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lowglow
Square has recently slowed down hiring. I'm not sure what that means but
internally they're not growing at the rate they once were. Some engineers are
holding their breath.

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msoad
Once Apple makes it possible to _receive_ money with Apple Pay, you know what
can happen to Square!

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tea-flow
Square Cash hasn't really taken off and its not a revenue generator for the
company.

Don't get me wrong, I love the product but I don't see where it as a great
business.

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ryanSrich
I'm seeing many comments about Sqaure not living up to expectations or slowing
down.

I guess I don't see that. Where I live I'd have to guess that 95% of food
trucks, coffee shops, and smaller restaurants use square. That's not including
the markets where square is pretty much exclusively used by all vendors.

I do agree that 6B is insanely high and most likely not what they are actually
worth. However I wouldn't say they are slowing down.

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swartkrans
Food trucks are not a big business. If you've captured the entire food truck
payment system, you're still not likely to be worth $6bn, especially not if
you're taking pennies on each transaction. It probably also doesn't take so
much money to manage such a business. I know someone who works at Square and
it's your typical high flying startup wasting money on pretty offices,
amenities, and other non-business related expenses, all while losing $100m a
year with nary an idea for how to ever reach $6bn in valuation. The people
giving out this money to Square aren't stupid, so there's probably something
we don't know, but then again the same kind of people gave a lot of money to
Color, RockMelt, Quora, Foursquare and some other less memorable walking
zombies.

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gress
Square's value is that it reduces the overhead for economic participation. If
you believe that in the future there will be a more networked economy with a
larger number of small businesses and individual tradespeople, then Square is
a great bet.

