New Twitter CEO tees up another big payout
It's been a busy month for Jack Dorsey. Square, the mobile payments company co-founded by the Twitter (TWTR) CEO, is going public.
Square, launched in 2009 and which Dorsey leads as CEO, registered on Wednesday to raise up to $275 million in an initial public offering, although that figure could change.
The San Francisco startup's technology allows merchants to use smartphones and other mobile devices as sales terminals.
Square reported revenue of $560.6 million in the first six months of 2015, up 51 percent from the year-ago period. It lost $77.6 million over that period as it seeks to expand. The company lost $154.1 million on revenue of $850 million in 2014.
In a prospectus filed with the Securities and Exchange Commission, Dorsey said Square was launched because co-founder Jim McKelvey "couldn't accept a credit card for his art," noting the laborious paperwork and complexity of setting up a merchant account.
"The entire process was exclusionary and unfair," Dorsey, 38, said in the filing.
"We've built one of the fairest and most efficient payments businesses in the world," Dorsey, who owns 24.4 percent of Square, said of the startup. "We made it possible to accept card payments in less than five minutes. We priced all payment cards at the same flat rate and eliminated complicated fees."
Twitter, the publicly held microblogging company Dorsey helped launch in 2006, last week installed him as its permanent CEO, removing the interim title he had carried since the June resignation of former chief Dick Costolo. Twitter today named Google (GOOG) executive Omid Kordestani as its executive chairman.
Square lists Dorsey's dual role as CEO of both Twitter and the payments startup in listing the potential risks of buying shares. "This may at times adversely affect his ability to devote time, attention and effort to Square," the prospectus states.
Square also warned that a major customer, coffee giant Starbucks (SBUX), plans to drop the service next year.
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Alain Sherter covers business and economic affairs for CBSNews.com.
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