{"id":24417,"date":"2021-05-20T05:43:10","date_gmt":"2021-05-20T05:43:10","guid":{"rendered":"https:\/\/rbsitsoftwaresolution.com\/blog\/can-squarespace-dodge-the-direct-listing-value-trap.html"},"modified":"2021-05-20T05:43:10","modified_gmt":"2021-05-20T05:43:10","slug":"can-squarespace-dodge-the-direct-listing-value-trap","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/can-squarespace-dodge-the-direct-listing-value-trap.html","title":{"rendered":"Can Squarespace dodge the direct-listing value trap?"},"content":{"rendered":"

It\u2019s Squarespace direct-listing<\/span> day, and the SMB web hosting and design shop\u2019s reference price has been set at $50 per share.<\/p>\n

According to quick math from the IPO-watching group Renaissance Capital<\/a>, Squarespace is worth $7.4 billion at that price, calculated using a fully diluted share count. The company\u2019s new valuation is sharply under where Squarespace raised capital in March, when it added $300 million to its accounts at a $10 billion post-money valuation, according to Crunchbase data<\/a>.<\/p>\n

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The company\u2019s reference price, however, is just that: a reference. It doesn\u2019t mean that much. As we\u2019ve seen from other notable direct listings, a company\u2019s opening price does not necessarily align with its formal reference price. Until Squarespace opens, whether it will be valued at a discount to its final private price is unclear.<\/p>\n

<\/a>While the benefits of a direct listing are understood, the post-listing performance for well-known direct listings is less obvious. Indeed, Coinbase is currently under its reference price after starting its life as a public company at a far-richer figure, and Spotify\u2019s share price is middling at best compared to its 2018-era direct-listing reference price.<\/p>\n

This morning, we\u2019re going over Squarespace\u2019s recently disclosed Q2 and full-2021 guidance. Then we\u2019ll ask how its expectations compare to its reference price-defined pre-trading valuation. Finally, we\u2019ll set some stakes in the ground regarding historical direct-listing results and what we might expect from the company as it adds a third set of data to our quiver.<\/p>\n

This will be lots of fun, so let\u2019s get into the numbers!<\/p>\n

Squarespace\u2019s Q2<\/h2>\n

Per Squarespace\u2019s own reporting<\/a>, it expects revenues between $186 million and $189 million in Q2 2021, which it calculates as a growth rate of between 24% and 26%. That pace of growth at its scale is perfectly acceptable for a company going public.<\/p>\n

For all of 2021, Squarespace expects revenues of $764 million to $776 million, which works out to a very similar 23% to 25% growth rate.<\/p>\n

In profit terms, Squarespace only shared its \u201cnon-GAAP unlevered free cash flow,\u201d which is a technical thing I have no time to explain. But what matters is that the company expects some non-GAAP unlevered free cash flow in Q2 2021 ($10 million to $13 million), and lots more in all of 2021 ($100 million to $115 million).<\/p>\n

Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/cta6EKBElLo\/<\/p>","protected":false},"excerpt":{"rendered":"

It\u2019s Squarespace direct-listing day, and the SMB web hosting and design shop\u2019s reference price has been set at $50 per share. According to quick math from the IPO-watching group Renaissance <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19],"tags":[25],"class_list":["post-24417","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","tag-enterprise"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t