We generated net losses of $85.2 million, $104.5 million, and $154.1 million
in 2012, 2013, and 2014, respectively. As of December 31, 2014, we had an
accumulated deficit of $395.6 million. For the six months ended June 30, 2015,
we generated a net loss of $77.6 million. As of June 30, 2015, we had an
accumulated deficit of $473.2 million.
Also wouldn't the timing act more as a distraction for Jack?
Given the wailing and gnashing of teeth this time last year  when Square raised $150M on a $6B valuation, it is entirely possible this is their last change to raise capital. If it doesn't work, and they can't cross the line into operationally cash flow positive they will become one of the larger unicorns to die this season. I really hope it isn't the case because I love their product and their service, but the S-1 doesn't paint a picture of hope. Doing some back of the envelope calculations I can't see any scale where they are profitable given their current fee structure.
> The new rule excludes from these calculations people who obtained equity under the company's equity compensation plans and investors who purchased securities pursuant to the crowdfunding exemption discussed in this alert.
“We lose money on every sale, but make it up on volume”
What are your calculations? Square, Stripe et al are making massive margins on debit card transactions right now. Thanks to recent regulations (the Durbin amendment), the average debit interchange fee is 0.89% all included. Square charges 2.75%. That means they're netting around 1.5-2% on debit transactions. That's huge for a payment processor.
Sure, they have higher costs for credit cards, and their easier sign-up probably means more losses from seller-side fraud. But if they can control fraud then 2.75% is still a healthy gross margin even on credit transactions. And it's crazy big margin for debit.
Here is a more optimistic analysis from Re/Code: http://recode.net/2015/10/14/squares-ipo-filing-its-complica... that looks at the numbers minus the Starbucks deal and concludes that their core business is healthy and has a path to profitability.
"While Square will be a much smaller business from a revenue standpoint after the Starbucks deal lapses, it will be a faster-growing one with a much better shot at profitability."
So what is their target valuation when they go public? If they were going for $1 - $2B valuation? I think the world might buy that, but since their last round was at $6B, their investors would probably be pushing for $10B (because if you recall the Box IPO you remember that none of the late stage investors want to take a down round into the public markets) and that is like "Square 10 years from now" valuations.
So lets watch this one closely and see if they can get commitments for all their shares on the road show. And if not, we'll probably see a giant recapitalization or maybe a firesale to PayPal or something.
OTOH Square is on pace to hit $1B revenue / year and growing quickly vs. anybody else in the processing space, but it will all come down to how the market thinks about their business and their ability to cross the chasm from very small merchants (which makes up the majority of their business and they have locked up because other processors / ISOs cannot compete with their customer acquisition costs) into the next tier of small businesses...
Along those lines, great article from Bill Gurley about revenue multiples: http://abovethecrowd.com/2011/05/24/all-revenue-is-not-creat...
Could you explain? I'm sure you have much more experience reading such numbers than I do, but at a glance they look viable if they can grow to something around double their size.
Ignoring Starbucks and doubling the amounts for 1H 2015 to make it annual, they'll have about $1000M of revenue from transactions, and will pay about $600M of transaction costs. They'll have about $500M of operating costs for 2015 and $100M of various other costs.
If in 201X they were to be double this size, they'd have $2000M of revenue, and $1200M of transaction costs. If they can keep their operating and other costs below $800M, they'll be profitable. Of their expenses, "Transaction and advance losses" will probably scale linearly, but all the rest plausible to be significantly sublinear.
Is this simplistic scenario clearly impossible for some reason?
- the termination of the Starbucks agreement in 2016 (this already saves $27 million/year based on the 2014 numbers)
- raising flat-rate processing fees for businesses in the future
- reduce the cost of transactions by adding more fraud-prevention measures that make credit card processors happy (e.g. Chip and PIN)
- create a new business that allows Square to cut out the credit card networks by owning both sides of the transaction
- create a new business using the information from being in the credit card processing flow that is profitable enough to subsidize the credit card processing
Right now, I suspect they're trying to "pull an Amazon" -- they're operating at a loss, but they hope investors will like the brand and the vision enough that they'll put money in anyway.
Their flat rate of 2.75% is substantially more than what Visa charges for "card present" transactions. The highest cost cards are 2.4% but they're going to be a small portion of most stores' card mix. I'd think most shops cost Square 1.1-1.5% across all their transactions. Debit volume exceeds credit volume in the US -- most people are swiping their bank check cards, not commercial purchasing cards and the highest end reward cards that require pristine credit -- and the Durbin amendment capped the interchange fee on debit cards (when swiped a-la-Square Reader) at 0.05%+$0.21 per transaction. That means 2.75% is 98% profit for Square on a big debit card swipe.
The only place Square's subsidizing the transaction fees is on very small purchases where the flat ~$0.15 of the interchange fee amounts to more than 1-2% of the total transaction, and with AmEx where, if Square hasn't negotiated better than sticker rate, they could be paying 2.85-3.5% depending on business type.
If they're losing money on the one thing they charge money for, what's the business? And how are their competitors doing it? PayPal's historically offered merchants with volume as low as 1.9%. They offer 2.7% flat rate (no per-transaction flat fee either) for their swiper.
Square can only hope to make a decent margin on its 2.75% pricing by 1. seeing a preferred distribution mix on card types (such as, high debit card usage; less Amex; less expensive rewards cards; high cards qualifying at card present rates & no downgrades) and/or 2. special interchange discounts with the networks based on growth initiatives and/or fraud tools.
If they can't generate enough $$ from processing revenue, they'll need to use card processing as a loss leader for other services (loans, analytics, marketing)...
They marketed their service for years as 'free from chargebacks' and then (without notice!) silently deleted transactions which had, in fact, been charged back: http://venturebeat.com/2012/03/07/tradehill-sues-suing-dwoll...
Harassed as many people as I could for information on FiSync so I could try to offer integration to local credit unions and banks and couldn't get any real information out of them on it; it was a phantom program back when I was looking.
How would Dwolla help Square cut out the CC companies?
Credit cards won't be immediately replaced as they are accepted virtually everywhere. I think Square could be positioned well to replace credit cards though using the old Microsoft model of embrace, extend, extinguish.
Embrace credit cards in the short game. Extend with direct payments (bank to bank and alternative line of revolving credit). Extinguish; pull the plug on the credit card companies once they achieve high enough rate of adoption.
Looking at their financial statements, net loss for last FY was 250MM but depreciation and amortization was over 700MM.
In other words, the loss they show is just a paper loss. They make money. Unlike Enron which was making paper profit but they were actually losing money.
If they consistently do this then they're not making money. Depreciation/Ammortization is just an accounting method to distribute investments over time. If you're consistently returning a net loss it's not just a timing issue. In this case maybe Salesforce is like Amazon and continuously reinvests free cash flow so they don't return a profit to shareholders and instead reinvest it into new business. Is that what you mean?
Wall street rewards growth over profits so incentives for Salesforce are to keep purchasing businesses which at least break-even (e.g. Heroku) which in turn show growth in revenue but don't necessarily translate into growth in profits.
As long as Salesforce keeps buying these businesses, they can keep showing paper loss forever without actually being in any danger of running out of cash. And while they are doing this, their shareprice might double or triple.
It sounds crazy that it actually works but I'm not the one who is going to argue with markets.
That's not true, or at least it's only partially true. In the end, Wall street values discounted cash flow. As Bill Gurley has said:
> So growth is good, correct? There is a reason to save growth for last. While growth is quite important, and even thought we are in a market where growth is in particularly high demand, growth all by itself can be misleading. Here is the problem. Growth that can never translate into long-term positive cash flow will have a negative impact on a DCF model, not a positive one. This is known as “profitless prosperity.”
In other words, as long as you can show sustainable double digit growth, you can afford to value based on growth. If you don't and all of the sudden you can't maintain a positive DCF, the Street will hit you hard. SFDC, Amazon, etc are all teetering on the brink of collapse and equally becoming the next Walmart/Exxon.
 - http://abovethecrowd.com/2011/05/24/all-revenue-is-not-creat...
It can be a great tactic if the businesses you build/buy are the same your shareholders would buy with the dividends you'd pay out since you'll save them some taxes. Since the mother company can also hope to add some value to the businesses it buys the end result can be quite interesting. Buffet's Berkshire is based on this kind of setup.
This is generally a win, if you're expanding, because it means you pay no tax on your free cash.
Note that this isn't necessarily true. You can have negative Net Income, positive EBITDA but negative FCF (what really matters).
Look at a company like Amazon, their net income was stunningly negative for a very long time  -- it's barely positive today -- yet their market cap is north of $250B. There is plenty of room for companies making losses to go public if they have a realistic plan to make profits in the future.
 - http://i.imgur.com/M9igHQK.png
In 2012, they lost $85m. In 2014, they lost $154m. How much bigger are were they in 2014 relative to 2012? If it's more than 2x (and I have no doubt it is), they're on the right track. If they're 5x bigger, they're doing fantastic - revenue growth is outpacing red ink growth by a healthy margin. That means sooner or later, they'll not only be profitable, but tremendously so.
Square is a category-killer, in a key category.
Says who? Growth is great, but it doesn't necessarily mean that profits are in the pipeline (e.g. Groupon).
And on top of that, what exactly is it that Square does that it's going to be profitable on? Is it the Point of Sale devices? Is it their Square Readers? Is it their small-business loans? They're not a terribly focused company, and maybe that's a reflection of their CEO doing double-time (completely speculation on my part).
Personally I see this as their last-ditch effort to grab some cash, to exit before the market gets worse. Their investors don't want to be left holding the bag when the IPO market gets cold, so it's better to cash out now while the name Square is worth something than to bet that they'll get bigger/better in the future.
We read about them because... I'm not too sure actually, I guess it's because they are burning VC money and have a splendid website.
As someone who uses other people's payment systems, Square makes me happy. It's a product that respects the users.
But too bad we don't actually make them money.
Really complex retailers with broad product lines, like supermarkets and big box retailers, will continue with highly customized in-house solutions. But for retailers with only dozens or hundreds rather than thousands of products, and limited budget to buy fancy solutions, it's a godsend.
And, because the customers are making a major, high-risk, customer-facing commitment, they're going to be very sticky, very unlikely to switch. Basically, Square is entering a market where the established players are too slow and coarse-grained to reach a lot of potential customers, and then they'll have a terrific barrier to entry. That sounds like a good deal to me, from an investment point of view.
Some citations would be nice
It's betting on a future, and the future is unpredictable.
"Too Big To Fail" is not the terminology I would ever want towards something I develop - I think Titanic.
I understand that businesses do not start out profitable from the get go, but $700 million in debt?
Edit: Here's First Data's S-1:
1. Shove it through while public market sentiments are still positive and accepting or riskier bets.
2. The numbers can only look worse in the future.
The fact that the company is in the red, in itself, is not a reason to stop going public. Companies like FireEye are in the red but have multiplied in market cap since going public.
FireEye debuted at $20. It hit a peak of ~$85 shortly after the IPO. Its closing price today is $28.76.
As of September, 40% of the companies that went public in the past year with market caps above $1 billion were below their offering prices. The market for IPOs has become even tougher since September. Just look at Pure Storage and CytomX.
In my opinion Square is getting out to market while they can.
The motive is to raise capital. The same as the motive to go public any other time.
> Isn't the public market more averse to companies operating in the negative.
In very broad terms, on average, sure, probably. But there's lots of factors in how the public markets react to a firm's offerings, and profitability is far from the only consideration.
How do you sleep at night being the founder of a company with half a billion dollars in deficit? How do you go to work everyday? Is this "normal"? Is this expected?
I really don't understand how that situation can happen.
Edit: I just looked up their numbers. They have large revenues, but still. Such deficits would scare me.
This is not a comment on Square's prospects, but their business model is clearly one that is betting on getting to very big scale before turning a profit.
On a more serious note:
Twitter has a large following of powerful/smart people who don't leave over night. Sure, over time these people could leave, but why would they? What would a twitter competitor offer that twitter can't offer?
LOL 13 people in the company own more than half. The thousands of employees get to split what's left after investors.
13 people will become BILLIONAIRES and centi/multi-millionaires, while the rest of the company that toiled for years gets (maybe) a down payment on a 1800sqft house on the peninsula.
Meanwhile everyone rails against wall street inequity and the Walton family and whoever else...
The table on page 176 is what I assume you're referring to.
I think you mean "hecto" rather then "centi". A centimillionaire has assets worth on the order of $10,000.
I understand what you were aiming for, however centimillionaire is the correct usage.
"A Deceased Centimillionaire Leaves $1.2B To Save Parts Of Rust Belt America"
"Unlucky Echelon of Ex-Centimillionaires Sees Stakes Plunge as Net Craze Fades"
I know a guy that took a CTO role at a company post-YC acceptance but pre-demo day for ~5%. I can't imagine what the rest of the crew is getting. Why even join a startup at that point?
If that advice is followed, it sort of naturally follows that there is no real rational reason to be particularly aggressive during equity negotiations, and that trading equity for other compensation is a smart move.
> I know a guy that took a CTO role at a company post-YC acceptance but pre-demo day for ~5%. I can't imagine what the rest of the crew is getting. Why even join a startup at that point?
Because the immediate pay and benefits, rather than the speculative equity gamble, is good, and because the work is what you want to be working on. And maybe you like the people/culture, too.
There is no inherent conflict between working on what you like with good people/culture, and also sharing fairly in the mega-riches in the remote possibility the thing is successful. But for some reason, employees routinely accept terms where they'll still be just making ends meet (at least in silicon valley, a million is barely a house) even if the company is so successful that the founders get to university buildings named after them.
If we wanted to be arbitrary about it, we could pretend that a janitor's time is worth a trillion dollars per hour because said janitor's time is a finite resource that can never be recovered. However that doesn't do much for you when you have to actually decide how to pay a janitor.
It sounds like as a serial entrepreneur you like to decide how to pay janitors, because you can buy a few years of their time for a relatively low cost that you can turn into wealth for yourself.
When a janitor is working, he isn't working for $4 an hour or whatever it is you pay him. He's working for the rent & the food that will keep him alive, so that he will have time to continue to living, and that time is valuable to him. That's what he's getting paid, and that's why he's willing to work for you for $4. Just because it costs you nearly nothing to hire some people for an hour doesn't their time is worth only $4. It's worth a lot more than that. $4 can buy enough calories to last for days, and that time will be spent with his friends, family and his children(? possible if in India), and that's called "intrinsic goods", something money alone can never buy, because money only buys you time to acquire those goods.
At a $6B valuation, that's $294M for everyone else.
$1,500,000,000 -- Jack (25%)
$828,000,000 -- directors/execs combined (38.8%, per jwegan's comment), minus Jack.
Jack himself will get as much $$$ out of Square as all his employees combined.... times FIVE.
The other 12 directors execs will split a pot that's over twice as large as all 1000 employees combined.
That's cool for you, a 5000-to-1 discrepancy between CEO and avg employee? That's the reward system that we should all embrace in this modern age? How is it any different from the cigar-chomping tophat-wearing magnates of the past? Yeah, today the founders wear cool jeans and turtlenecks, and employees DO take home a nice little down payment, but the huge dropoff between the billionaire and the rank-and-file is as disgusting as ever.
Jack had (I assume) something that was 100% his in the beginning (or his and Jim McKelvey's - I don't know the story). They built something of value. They gave parts of it away, as well as cash, to people in exchange for doing things for them. Over time, the company that he owned continued to gain value, because people were willing to pay money to that company for the service it provided. At each point, every customer they served and every employee they took on presumably thought they were getting a good, fair deal. (If you're not getting a good deal, don't do business with someone.) At the end, the thing he owned was worth $1.5B.
What should have happened differently? In some alternative universe, perhaps everyone all along the way, every possible employee, could have demanded a larger percentage of the equity in return for their labor. But they didn't. I don't see why it's necessarily reasonable to, from the outside, say that anything is wrong, and reach in and start redistributing wealth. People can probably become billionaires today more easily because technology scales better than in the past, and because there's an investment environment that supports it.
Imagine I found a company solo. All by myself. I provide a service that lots of people are willing to use, and they're willing to pay me for. Maybe I've cracked the problem of Strong AI, and I'm selling my AI's services. It's software, and it scales well, so before long my company is worth $1B. I'm still running the company all by myself. How should it play out? If I brought on an employee at some point as a sysadmin should they automatically receive a percentage? (If they negotiated for that, then yes, otherwise no.)
The real math is 33.6% to investors holding a >5% stake, 38.8% to execs & directors, and 27.6% not represented (probably a mix of investors and the employee option pool)
Well, what is your opinion of the $ and % that non-founders get at startups (regardless of success)?
In addition to the $150 million loss in 2014, looks like the revenue side doesn't look too good either. From their operating data,
Total revenue = $707.8 million
Starbucks revenue = $123 million
So they would likely lose > 17% revenue very soon.
It looks like they loose money on every single Starbucks transaction. Sounds like a good thing.
Companies that act as gateways are not making large chunks of cash so every basis point matter.
edit: spelling, structure
If I'm a potential customer and I see Square losing its Starbucks account and 17% of its revenue I'm going to be somewhat wary of its ability to exist in 3-5 years, and then I'll have to incur costs of switching back to some other payments processor.
I thought their competitors were First Data, Vantiv, Total Systems Services, Global Payments, and Heartland Payments Systems, etc. Does Square issue cards/ credit? It's not clear everybody in this discussion has the same facts.
Edit: Replaced pronoun with proper.
And all the new "mobile" payment platforms coming out. Companies you mentioned are HUGE and some are subsidiaries of larger banks.
First Data just started trading today under the ticker NYSE:FDC where they were taken private by KKR in 2007. Prior to that they were spun out of AMEX back in 1992.
>Its way, way more complex then that
Please don't do this. I worked in the industry for 5 years and have quite a firm grasp of it (it's only been 8 years since, and the industry hasn't changed much).
Also, I had no idea that FirstData went public, in my dealings with them, I always delt with Bank of America Merchant Services, which acted as if First Data was their subsidiary. This opinion came from reading our BAMS contract.
Coming from the merchant's side of things, and dealing with this for over a decade, it "feels" more complicated. However, considering you were on the inside, your first-person version is more accurate.
Hope you didn't take offense.
The big 4, as you put it, have very little to do with the actual processing of credit cards. They are the "finish" line of a consumers transaction. In between a consumer and the credit card company, there will be a terminal/pos vendor, a data vendor, a gateway, and a processor. Every single one of those folks takes a cut. In addition, all of those companies are part of larger conglomerates.
So, if you go to your favorite burger/salad/sushi/coffee place, their system will take your credit card, will have another company (like Datawire) create a secure connection to a gateway (lets say First Data) and then hand it off to the processor (BAMS), who will then process your credit cards but not fund them. Once the batch is processed, then the credit card companies will fund your account.
So Square is trying to "disrupt" this business, and create their own connection. However, it's not in AMEX/VISA/MC/Discover's best interests to deal with them. In addition, BAMS (Bank of America Merchant Services), Payment Tech (Chase), and AMEX run processors as a subsidiary, and then gateways (First Data) are parts of their conglomerate. First Data is part of BAMS, WorldPay is joined NCR/VISA/MC and VisaWorld is Visa/MC/Discover.
This is outside the "large" players like Heartland that process a tremendous amount of information.
Square is successful because the "pie" is huge, and growing every day. More and more people are using mobile payment and plastic vs Cash. With increased competition, basis points are king. ONE basis points on 3,000,000,000 in transactions is only 300,000. So for a company to bring in 1,000,000 they would have to essentially process a trillion dollars based on a single basis point commission.
I can go on and on about this giving you exact figures and numbers but I hope I've earned enough "trust" for you to believe me that sometimes letting go of 17% of your total revenue will actually bring you more cash.
Think of it like a bar that fired the bartender who gave away all those drinks. Yes, less people and less money in the drawer but more profit =D
Here are two articles for anyone who is interested in learning more:
 : https://www.quora.com/What-is-the-difference-between-a-payme...
 : http://www.chetu.com/blogs/finance-2/choosing-between-paymen...
Their transaction costs are lower than their competitors because they're losing money. I'm sure AMEX would have cheap transaction costs if they were willing to lose staggering amounts of money. I could form a startup to sell gasoline for $1/gallon over the internet. Sure I'd lose tons of money, but look how cheap my gas is compared to BP. Well of course BP is earning a profit whereas I'm losing money on every gallon, but I'm sure after the IPO...
They have some traction in very discretionary consumer spending. Not the best place to be in the start of a recession. And public policy has been, is, and will be, to concentrate as much money as possible at the top while draining it out of the bottom. Why would you open a new Ferrari dealership in Detroit? Or rephrased the digital money of the future for farmers markets is EBT "food stamps" cards, not an iphone app. That discretionary money being spent at the coffee shops and farmers markets is "supposed to" by policy all go to .edu, bank mortgages, and health care. The economy is trying to destroy the sector they are trying to middleman off of, good luck with that long term. They're sailing the wrong direction at the customer level.
Speaking of competitors... well why even comment in detail about each. The problem with payment middlemen isn't so much that they're there as a class, its that there's so many identical ones. In my alternate life as a volunteer treasurer for a non-profit everyone wanted digital donation/payment processing, however everyone wanted a different one, and I am SO not going to jump thru those hoops, so its cash and checks only. Its like insisting I open a bank account at every branch in the metropolis, good luck with that. Maybe we need a middleman for the middleman to manage the middlemen.
I hate to imply history is repeating but this is pretty much Flooz again, isn't it? Those who don't know history are doomed to repeat it?
As you've said, there is a middle man of the middle man who manages the middle man. That's not Square's bread and butter. They're going after the low hanging fruit: small businesses, food trucks, flee market sellers, etc.
They can't compete in the POS world but they can get theirs.
However, you are foreshadowing something else, in my opinion: Square is the small fish nipping at the large pie while the big fish are swimming away from Sharks. If Square attempts to grow too quickly or expand too fast, they'll get swallowed up. They won't be bought, just forced out of business.
I think they can have value, but in 10 years - slow and steady.
Filing for an IPO does not mean you're slowing growth...it's just an alternate form of fundraising that allows a different mix of investors to join in on the fun.
Amazon is a different beast because they live at the razor's edge of profitability and have for years. Square is not close not to mention they're competing with entrenched competitors.
Somehow that seems wrong to me... Is Square counting money-through-the-system as revenue? Is that what it is? To me it feels like their revenue would be their cut of the money that runs through the system, so some small percentage of the $707m. Is this a common thing to do, in this area?
Credit card gateways, like square, take a fraction of the transaction during processing. If their deal did not include the pass through rates of Amex, Visa, MC and those companies raised rates, that would be coming out of Squares pocket.
We intend to make this big! Thank you for your support and potential investment in Square.
How do you make something valuable? Convince others it has value, and do it with only 20% of your stake.
Jack already gave 15 million shares which represented 20% of his own equity back to the option pool and to a foundation to help underserved communities, and he's committed to giving an additional 40 million shares to the foundation..
He's going to give away ~75% of his ownership in the company he founded to employees and entrepreneurs in underserved communities. Whatever the price is on IPO day, this will surely amount to him giving away at least a billion dollars.
I can't fathom why people are so cynical, this is amazing.
edit: a roundup from the WSJ, Fortune, and other random news places suggests strong concern over the CEO situation. That seems fair. I would definitely discount the value of a non-profitable company with a part-time CEO. :-/
That said, having a "stupid simple and ubiquitous payment platform" should be a really easy way to print money. Why hasn't it? I think that story is the interesting one.
Square primarily does POS systems. I don't believe the two companies really compete in any real way yet.
First Data is practically 90% of payment terminals in the US.
In any case, I should find the filing and read it. I came up with a similar and much worse idea about 6mo before Square came out, and I've been a total fan of Square ever since.
This could be the IPO that ends the party. One of the top candidates for first Unicorpse (see also Evernote).
What is your rationale?
Throw in all the regulatory hassle of dealing with money and its transfer, as well as liability for fraud, and competing in an industry as exciting as refrigerators...
They ran trials in the Bay Area in summer 2008, launched GoPayment properly in early 2009 (with a Bluetooth reader supporting various feature phones), and launched an iPhone app in August 2009.
Square announced their card reader in December 2009 and didn't actually launch until the following May.
I actually didn't look up what their revenue growth was, I am just saying that is the case. But either way, it doesn't paint a really rosy picture.
By Marc Hogan
I bet March 2015 was not a fun month at Square.
Every time a startup IPOs the investors now have a chance to exit and re-invest in other startups with the fresh capital.
So it will likely take some time for VCs to liquidate their position, return the capital to LPs, and then have the LPs reinvest in the same or other future VC funds.
All that said, a good return on a single investment will be seen positively by LPs and will make it easier for a VC to raise future funds, which is generally good for startups.
My only real point is that the money made directly from the Square IPO will likely not be deployed for quite awhile, and other events can turn momentum against startups in the meantime.
Google also has their own hardware & payment system. What does Square offer that Google doesn't already have, more or less?
Square's user base and momentum on the retail side. Even if there is nothing special in the technology, they might be worth buying for that.
I do like the company. Just curious if they have any patents that will prevent competition?
This will buy Square some time while it shops around for a buyer but that's assuming the capital market is still liquid and happy and there's no market downturn.
If he does, then maybe you could give the charitable interpretation of that he's joking.