According to sources, as the mobile payment innovation company Square's losses continue to expand and cash continues to decline, the company has begun negotiations with potential competitors holding large amounts of cash on potential acquisition issues.
It is reported that Google had negotiated with Square on the potential acquisition issue at the beginning of this year. Prior to this, the top two companies had held talks on acquisition issues in 2012. However, it is unclear whether the two companies are still negotiating on the acquisition issue. In addition, Square used to have informal talks with Apple and eBay's PayPal on trading issues, but these conversations never turned into substantive negotiations.
According to sources, Square's net loss in 2013 reached a record $100 million, and the loss increased from the previous year. It is reported that the innovative company that has been established for five years has “burned out†more than $110 million in revenue last year. Since 2009, Square has raised approximately $340 million through four rounds of funding; however, in the past three years, Square has “burned out†most of the funds raised.
The spokesman said, "We don't have and have never negotiated with Google on the acquisition issue." The spokesperson also said, "We are grateful that Square may be an attractive acquisition target for some companies, but we are Never thought about selling the company carefully, nor did it negotiate with any company on this issue.†A PayPal spokesperson said, “We have not negotiated with Square about the acquisition.â€
If sold outside, Square is expected to sell billions of dollars in high prices. Square Dormiter and CEO Jack Dorsey is a well-known entrepreneur with design talent in Silicon Valley. Dorsey is also a co-founder of Twitter and participated in the company's initial public offering in November 2013.
In the past few years, with the increasing popularity of the Square brand, Dorsey has helped the company raise funds at a very high valuation. According to sources, Square insiders sold part of the company's shares through the non-public market at the beginning of this year, and the transaction price valued Square for about $5.2 billion.
Currently, Square's square credit card readers are used by nearly 1 million merchants. By connecting to a merchant's smartphone or tablet, merchants can accept credit or debit card payments anywhere. According to sources, Square handled more than $20 billion in transactions last year and earned about $550 million in revenue.
However, as of now, the profit margin generated by Square's business is still extremely limited. According to data provided by Square's official website, the company usually charges 2.75% of the transaction amount to the merchant as a commission. About four-fifths of the commission collected is paid to companies such as Visa and MasterCard as payment fees.
According to sources, in the first quarter of 2014, a senior executive at Square told a potential acquirer that the cash held by the company might be “burned out†within nine months. This data has been confirmed by another source close to Square. This month, it is reported that Square has received more than $100 million in credit support from five banks led by Goldman Sachs, thereby enhancing Square's financial resilience.
Square's financial situation may narrow the company's choices. According to sources, Square discussed with the investment banks such as Goldman Sachs and Morgan Stanley on the initial public offering last year. However, these negotiations have been temporarily suspended. Rick Oglesby, an analyst with consultant Double Diamond Payments Research, said, “Square looks a lot like a company in transition. Although Square has achieved great success in the small and micro market, the market is currently profitable. Sex is not high, so Square needs to upgrade the market to find a true source of revenue."
At the end of 2012, it formed an alliance with Starbucks. According to sources, although the deal will allow Square to receive billions of dollars in transactions, Square’s handling of Starbucks last year was only a little more than 2% of its transaction amount. This means that the deal between Square and Starbucks caused the former to lose at least $20 million in 2013. As of now, Starbucks has not commented on this.
According to sources, Square's gross margin in 2013 was 21%, down from 27% in the previous year. Square has been continually adding new services, and the future profitability of these services is expected to exceed the current mainstream payment business. In the 12 months of the equity couple, Square launched the Square Cash and Square Market online marketplace services that allow users to send money directly via email. In addition, Square also launched a new product Square Stand for merchants, hoping to replace the traditional ugly POS cash register system. Dorsey said in an interview with Bloomberg TV last fall, "We didn't see ourselves as a payment company. We see ourselves as a business company."
According to sources, the negotiations between Square and Google have resumed in recent months, but it is not clear whether the two sides will still trade. The technology website The Information reported earlier this month that Google is currently considering the acquisition of Square, but the two companies are not currently negotiating on this issue. Analyst Oglesby said that if Google buys Square, the news will never surprise the industry because their payment business is highly complementary. Through the Google App Store; ogle Play, the company's payment service; ogle Wallet has acquired a large number of users, but did not form an alliance with several physical store retailers. At the same time, Square has merchants, but not many consumers.
Industrial Electric Linear Actuator
Solar tracking linear actuators are being used widely in different applications. UPLIFT is one of the leading manufacturers of standard solar actuators in China, with several years of experience .
We have different types of actuators specific designed for solar tracking applications to deliver optimal performance.
Most outstanding advantages of our solar actuator: high precision,anti-rust performance,high durability,extrodinary load capacity. Those features make linear actutor for solar tracking system works far better and suitable for varisou applications.
Industrial Electric Linear Actuator,100Mm Linear Actuator,Actuator Electrical Linear,Linear Actuator Remote,Linear Actuator High Speed
Suzhou Uplift Intelligent Technology Co., Ltd , https://www.upliftecdesks.com