Squarespace Inc. shares opened 4% below their reference price as the web-design company made its public debut.
The stock’s
SQSP,
-2.99%
first trade was for $48 a share at 1:19 p.m. ET Wednesday, below the reference price of $50 that was set in conjunction with the company’s direct listing. Shares recently changed hands at $49.66.
Because Squarespace held a direct listing, it didn’t raise new funds through the process of going public. Wednesday’s trading action puts Squarespace on track to close the day with a market value of about $6.8 billion, below the $10 billion private-market valuation it fetched after a March funding round.
Squarespace non-IPO: 4 things to know ahead of web-design company’s direct listing
Squarespace makes technology that enables businesses and individuals to set up websites with storefronts, email-marketing, and other capabilities. The company saw benefits during the pandemic as more small businesses moved to establish themselves on the web.
The company believes that building for the web has become “democratized” with tools like Squarespace “rapidly displacing expensive agencies” by making it easy for people with little web expertise to design and manage sites, according to Squarespace’s prospectus.
Squarespace generated $621 million in revenue last year, up from $485 million a year prior. It was also profitable in 2020, posting net income of $30.6 million, below the $58.2 million it recorded a year earlier.
The company had 3.7 million unique subscriptions as of the end of last year and generated 94% of its revenue from subscriptions.
It sees opportunities to further expand the customer base, particularly in international markets, and to build out its enterprise capabilities so that it can better appeal to larger businesses.
Squarespace’s direct listing comes as the Renaissance IPO ETF
IPO,
-0.64%
has lost about 12% so far this year and as the S&P 500
SPX,
-0.62%
has risen 9% in the same span.
