Square Rises After Visa Gives Details on Convertible Sharesby
Square Inc. gained the most in almost three months after Visa Inc. disclosed details about its stake in the mobile-payments company.
Square rose 7.9 percent to $9.30 at the close in New York, paring the stock’s loss for the year to 29 percent.
In a regulatory filing Thursday, Visa disclosed holdings of 4.19 million Class B Square shares, and said it could convert as many as 3.52 million into Class A stock. Upon conversion that would give Visa the equivalent of a 9.99 percent stake in the Class A shares.
Visa acquired shares in Square in 2011 but the terms were never disclosed. After Thursday’s filing, some media reports initially suggested that Visa was buying a new stake of 10 percent in Square. Visa clarified its position later Friday, saying that its current holdings represent about 1 percent of Square’s fully diluted common equity as of Dec. 31.
Run by Chief Executive Officer Jack Dorsey, who also leads Twitter Inc., Square got its start by creating small devices that plug into smartphones and tablets to let merchants process payments made by cards, from which the company usually takes a 2.75 percent cut per swipe. Square sold shares in an initial public offering last November at $9.00 a share.