How to trade Squarespace’s IPO

Squarespace is not yet publicly traded but the company is planning on offering its shares to the public on 19 May 2021. This will be through a direct listing rather than a traditional initial public offering (IPO) process.

In a direct listing, no fresh capital is raised in advance and Squarespace’s share price will be determined by orders coming into the stock exchange. This also eliminates any restrictions from the lockup period in an IPO. Companies often settle for a direct listing if they do not need to raise any more capital, and it can also save on other costs such as banking and marketing fees. Other companies that recently opted for a direct listing include Coinbase, Palantir and Roblox.

Squarespace’s IPO date is set for 19 May 2021. The company will list on the New York Stock Exchange under the ticker symbol ‘SQSP’, after filing for a listing with the SEC in January. Remember that Squarespace’s IPO will take place under different stock market hours to the UK, so this will be in the afternoon when the NYSE is open.

Although no share price has yet been released for Squarespace, the company has registered approximately 40m shares for its listing. In March 2021, it raised $300m from investors including Tiger Global, Fidelity Investments and D1 Capital Partners. According to this previous valuation in March, Squarespace could have an estimated market capitalisation of over $10bn.

Squarespace has made substantial profits since 2004, the year that it was founded. By the time university student and CEO Anthony Casalena graduated in 2007, it was making annual revenues of $1m, despite him being the sole employee of the company.

In Squarespace’s end of year report for 2020, the company reported a revenue increase of almost 30% to $621.1m in comparison with the previous year. Between 2018 and 2019, Squarespace’s market share increased from 0.7% to 1.5%, which is a year-on-year growth of 114%. Due to the Covid-19 pandemic, Casalena reported a surge of new customers and start-up businesses that requested the company’s services.

Squarespace has raised capital through funding multiple times, in 2010, 2014, 2017 and 2021. In 2017, the business was valued at $1.7bn, compared to four years later, where it is now valued at approximately $10bn, showing how quickly the company has grown in a short period of time. It has also acquired a number of tech start-ups in the US, including hospitality-based platform Tock and social media app Unfold.

Squarespace is a company within a very competitive market, which means that when it debuts on the NYSE, it will be up against its rival companies. Although it is a rapidly growing company, it still only represents a tiny percentage of the software and technology industries. Below are some Squarespace alternatives that offer similar services. Some are available to trade on our online trading platform, so register for an account to take advantage.

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