The website design company ended its first day of trading on the New York Stock Exchange with its value slashed by a third.
Website builder Squarespace ended its first day of trading on the stock market on a glum note with its valuation dropping by more than a third.
The company, which helps businesses create websites and e-commerce functions, went public through a direct listing on Wednesday (19 May) on the New York Stock Exchange.
The day ended with Squarespace valued at around $6bn – well below the $10bn valuation it had after a funding round in March.
Ahead of the listing, Squarespace raised $300m from investors including Tiger Global, which tagged the company with its $10bn valuation. It shortly followed that funding round with the $400m acquisition of restaurant booking platform Tock.
In its financial forecasts for the current quarter, Squarespace expects to bring in between $186m and $189m in revenue, which would be growth of almost a quarter year-on-year. It expects full-year revenue for 2021 to be between $764m and $776m.
Squarespace is betting on more and more businesses going digital and needing website services as a revenue driver for the company.
“[We] believe the recent additions of new products will allow us to develop deeper relationships with our customers as they find more value in our all-in-one solution,” chief financial officer Marcela Martin said of the forecasts.
Squarespace’s listing came amid a difficult atmosphere for tech stocks with several companies dipping throughout the day.
Meanwhile a number of companies, including insurer Enact Holdings, have recently pulled their planned flotations in response to the jittery market. The bumpy week marks a readjustment for what has been a frothy year for public listings, even though it’s only May.
According to Dealogic, initial public offerings in the US have raised a total of around $150bn so far this year – the total for 2020 was $167bn. Meanwhile blank-cheque companies, or SPACs, have soared in popularity as a means to bring a company public but the method has also attracted increased regulatory scrutiny.