SAN FRANCISCO — Square bounced back in its stock market debut Thursday after the once-hot mobile payments service slashed the price of its initial public offering to get the deal done.
The 6-year-old company’s shares gained $4.07, or 45 percent, to close at $13.07.
The surge helped ease the pain of a mortifying markdown in Square’s IPO price. The San Francisco company sold 25.7 million shares at $9 apiece after money managers leery of Square’s unprofitable history refused to pay $11 to $13.
The concession appeared to attract bargain hunters betting that Square is worth the price that its management team had been demanding in the IPO. Even with Thursday’s rally, Square’s stock remains below the $15.46-per-share price that the company fetched a year ago when it raised $180 million as a privately held startup.
Investors’ skittishness toward Square, known for its debit and card readers that plug into mobile devices, reflects uncertainty about the direction of the global economy as the Federal Reserve Bank prepares to raise short-term interest rates for the first time in nearly a decade, said James Gellert, CEO of the research firm Rapid Ratings.
“Large, institutional investors taking a risk on technology want a discount now,” Gellert said. “There is a lot of concern about more market volatility in the year ahead.”
Some investors are worried about distractions facing Square’s co-founder and CEO Jack Dorsey. Dorsey is also serving as CEO of Twitter at a time that the messaging service is struggling to expand its audience and produce the first profit in its nine-year history.
