Squarespace share price: will it recover from the choppy float?

  • Squarespace Inc (NYSE: SQSP) share price drops to US $ 49.56 per share
  • It did not go public via an IPO, but instead chose a direct listing
  • The stock opened below the benchmark price of $ 50 per share
  • Its growth plans include expanding its e-commerce customer base
  • Buy and Sell Squarespace Shares with an IG Account

Squarespace share price: what’s the latest?

Two days after a disappointing start, Squarespace shares have still not crossed the so-called benchmark price assigned by the exchange operator.

The New York Stock Exchange (NYSE) newcomer fell 0.6% overnight to close at US $ 49.56 on Friday (May 21, 2021). It climbed 14.3% to close at US $ 49.87 on Thursday.

Squarespace opened at US $ 48 last Wednesday (May 19, 2021) for its debut. This represents a drop of 4% from its benchmark price of US $ 50, set by the NYSE as a guide for investors and to satisfy the opening mechanisms for trading.

SQSP stock closed its first day at US $ 43.65, which earned it a market value of around US $ 5.9 billion. That’s a steep drop from its valuation of US $ 10 billion after a funding round in March, Reuters reported.

Why didn’t Squarespace go for an IPO?

As part of its direct listing – chosen rather than a traditional initial public offering (IPO) – Squarespace has not issued any new shares to raise capital.

Its existing investors could generally start selling stocks based on demand when trading opens, without waiting for a lock-in period to expire, Bloomberg noted. The entry price is determined by the orders entering the stock exchange.

The New York-based web hosting service is backed by venture capital firm General Atlantic, as well as venture capital firms Index Ventures and Accel, among other investors.

Squarespace founder and CEO Anthony Casalena previously said the company chose a direct listing in part because it would be “ a little bit independent of what’s going on in the market every day. ”

Its poor start came against a backdrop of a broader market liquidation, as inflation fears and falling cryptocurrency prices prompted U.S. stock markets to fall for three consecutive days.

Squarespace was the first direct listing in recent months to end its first day of trading below the benchmark price, Bloomberg noted.

What are the next steps for Squarespace?

The website creation and hosting company reported total revenue of $ 621 million last year, up 28% from $ 485 million in 2019. However, net profit fell. established at around $ 31 million in 2020, almost half of the $ 58 million the year before.

Squarespace intends to expand beyond web hosting and e-commerce, the company said in regulatory filings. Its growth plans include expanding its customer base, particularly internationally, and deepening its commercial offerings.

Its e-commerce business posted revenue of $ 143 million last year, up 78% from 2019.

In addition, Squarespace is also considering other strategic acquisitions to accelerate its key platform, product and marketing initiatives.

In March, it acquired food service provider Tock, which provides technology for online reservations and take-out services, for more than US $ 400 million.

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