IPO

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Finance Answers
1. A prospectus is a legal document required by the security exchange commission which provides the details of an investment offered to the public for sale. It is the first document offered by the issuer of securities and it gives details about the business and the organization at large and other security information like the amount of shares supposed to offered publicly for purchase, certificate issues, and the offering price.
2. N/A
3. a. 27,000,000 class A common shares will be immediately available for sale in public markets and proceeds are expected to be received immediately the sale is made beginning the date of the prospectus. The remaining shares from the total will be eligible for sale to public markets after 181 days since the offer was made in the prospectus date. This is based on some instances such as volume and restrictions of rule 144, insider trading policy and market standoff agreements.
b. At the IPO, there were 27,000,000 shares of class A to be sold. This involves a combination of 25,650,000 shares by Square and another 1,350,000 shares issued by the selling stockholder. Class B common stock to be offered was 300,944,711. This makes the total shares to be offered at the IPO to be 327,944,711.
c. The lead underwriters were J.P Morgan Securities LLC. They own approximately 10% convertible preference stocks, which will act as class B common stock as per this offer. Morgan Stanley & Co. has also agreed to act as an independent underwriter in connection to the ruling as per the rule under 5121 in relation to this IPO.

d. For common socks of class A, the price per share is $ 9.0. This translated to $ 211.2 million raised from these shares of class A once deductions were made from offering expenses, commissions, and discounts from underwriting. For common class B, 106,133,176 shares will attract a $ 6.95 per share and another 9,543,645 shares will attract $ 10.92 per share.
e. An underwriting spread is the amount obtained when you subtract the amount an underwriter pays and the actual market price for securities. Normally, it is referred to as total profit incurred by the underwriter. In this case, the spread for the class A common stocks is $ 1.11 given by the market price of $ 9.0 subtracting the paid price of $ 7.89 after dilution.
f. I would not expect any dividends. The company is not planning to declare any dividends for the holders of its common stocks. Also, for the near future, there are no dividends that square will pay. I advise that any investors seeking cash dividends not to invest in these shares. This information is found on page number 85 of the word document. According to the dividend policy on page 89, there has never been any declaration or payment of cash dividends on the company capital stock. All current proceeds are planned to be re-invested into the business to support its operations.
4. According to data provided by S&P Global Market Intelligence, the SQ stocks increased by 37.1%. Initially, prices decreased at early stages of release in August but later gained huge margins as shown in the graph below.

Work cited
S-1.” SEC Emblem, 14 Oct. 2015. Retrieved from www.sec.gov/Archives/edgar/data/1512673/000119312515343733/d937622ds1.htm#t