NYSE sets Squarespace's reference price at $50 per share for its direct listing on Wednesday, which would give the company a market value of about $6.8B
- Web-hosting service going public via direct listing Wednesday — Squarespace was valued at $10 billion in March funding round
Context & Ripple Effects
Squarespace's road to the NYSE has been fast: a confidential filing in January, a $300M raise at a $10B valuation in March, then an April filing revealing $621.1M of 2020 revenue with actual net income — a rare profitable profile among recent debuts (direct-listing filing details).
Today's $50 reference price implies roughly $6.8B, a clear markdown from the March private mark. The mechanics follow the template NYSE used when it set Slack's $26 reference price in 2019 — a signaling number from booked orders, not a fixed offer price, since a direct listing raises no new capital.
First-order effects
- Existing shareholders — employees and the investors who bought into the March round — face an opening print that starts them underwater relative to their $10B private valuation before any trading begins.
- Because the company sells no shares, there is no primary cash infusion; liquidity flows entirely to insiders who choose to sell on day one.
Second-order effects
- A public price below the last private round reprices every comparable late-stage SaaS asset, forcing other venture-backed companies to either accept markdowns at debut or delay going public.
- ZipRecruiter following within a week at an $18 reference price and ~$2.4B fully diluted value shows direct listings becoming a repeatable route rather than a Slack-era novelty — NYSE is now running this playbook as a product.
Third-order effects
- If the pattern holds, direct listings become the default exit path for profitable tech companies that don't need growth capital, eroding investment banks' underwriting fees on that segment of the pipeline.
- Persistent gaps between final private rounds and opening public prices would push institutional investors to demand flatter late-stage valuations, cooling the pre-IPO funding market that set Squarespace's $10B mark just two months earlier.
The trend: Late-stage tech companies are bypassing traditional IPOs to let the market discover their price directly — and the market keeps marking down what private rounds had bid up.