Shares in US mobile payments company Square have made a spectacular debut, with shares opening at $11.20 on the New York Stock Exchange, 24 per cent above its initial pricing.
They rocketed as much as 50 per cent, surpassing the $14 mark, before falling back down in afternoon trading to close at $13.16.
The startup founded by Twitter CEO Jack Dorsey priced shares at $9, well below the $11-$13 price range expected, giving it a valuation of $2.9bn. Even that expected range had valued the company at 42 per cent less than a year earlier.
The float is being viewed by many as a bellweather for tech stocks and the durability of so-called unicorns – highly valued venture capital-backed startups, raising fears that there is a tech bubble.
However, investors appear not to have been put off with shares shooting past even the top end of pricing expectations.
"It was a frustrating start, as it took 40 minutes for 'price equilibrium' to be found and the first trade to go through. It makes you wonder why Dorsey didn’t just pay the offer to get things rolling. Eventually the stock opened at $11.20 – a decent premium on $9," said SpreadCo senior market strategist David Morrison.
Dorsey, who is celebrating his birthday today, rang the opening bell on the NYSE with his mum.