- REUTERS/Rebecca Cook
Payments processing startup Square has officially filed to go public after a long buildup.
“Jack Dorsey, our co-founder, President, and Chief Executive Officer, also serves as Chief Executive Officer of Twitter. This may at times adversely affect his ability to devote time, attention, and effort to Square,” reads the document.
Dorsey officially accepted the gig as Twitter CEO last week, after serving in the role in an interim basis for the past several months following the departure of Dick Costolo.
Dorsey has long promised that he would never leave Square, the company he started, which has led to a lot of consternation over the feasibility of one executive holding down two such roles.
Some of the risk factors are pretty standard, including the normal warnings about how Square’s growth may not be sustainable, and that the company isn’t profitable.
But a standout risk factor here is the fact that coffee giant Starbucks, which moved to end its relationship with Square late last year in order to put in its own mobile payment and ordering system, has been losing Square a lot of money.
In 2014 alone, Starbucks transaction revenues with Square were $123 million – but that revenue incurred almost $151 million in transaction costs. In other words, Starbucks is costing Square more money than it makes. Still, it’s identified as a risk factor because it hurts Square’s revenue growth.
Square has already let Starbucks out of its contract, which was supposed to last until October 1st, 2016, a full year early. The filing indicates that Square will not be renewing that contract.