Square to Raise $100M at a $6B Valuation(bits.blogs.nytimes.com) |
Square to Raise $100M at a $6B Valuation(bits.blogs.nytimes.com) |
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...
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?
Fred Wilson explains it pretty well here.
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.
Don't get me wrong, I love the product but I don't see where it as a great business.
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.
The point is, even if Square hit some kind of real P/E that made them a $6bil company, they wouldn't be doing anything nearly as impressive or substantial as actual companies who are today worth $6bil.
Is it, though? I haven't seen many new POS terminals in a long time.
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.
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.