Squarespace stock closed down ~9% at $43.65, after opening at $48 per share, valuing the company at ~$5.9B, well below its $10B valuation in March
Context & Ripple Effects
Squarespace's first day as a public company closes a two-year arc from private hype to public repricing. In January it filed confidentially for an IPO, then pivoted to a direct listing with a NYSE reference price set at $50 just a day earlier — implying roughly $6.8B. Instead, buyers opened lower and pushed the stock to $43.65 by the close.
The gap is sharpest against private-market marks: just two months before the listing, a $300M raise valued the company at $10B, meaning the last private investors entered at nearly double where public buyers were willing to price it on day one.
First-order effects
- Investors who bought into the March $10B round are underwater immediately — their shares are worth roughly $5.9B at market, a ~40% haircut against their entry mark.
- Because a direct listing has no underwritten offering, existing shareholders and employees holding stock face a market price well below both the $50 reference point and their recent private-round valuations from day one.
Second-order effects
- The day-one discount sets a cautionary benchmark for other late-stage SaaS companies weighing a direct listing versus a traditional IPO — private marks set months before float now look like stale pricing, pressuring whoever prices the next deal to build in a bigger gap.
- A sub-$6B market cap makes Squarespace small relative to the platform giants it competes with, weakening its currency for acquisitions and talent packages priced off stock.
Third-order effects
- Public markets refusing to honor private-round valuations points toward the pattern this story eventually confirmed: three years later Permira took Squarespace private, raising its bid to $7.2B — a structural shift where growth-stage software companies that debut below their private marks end up owned by buyout firms rather than public shareholders.
The trend: Late-2020/2021-vintage direct listings exposed the gap between private-round valuations and public-market pricing, feeding a wave of take-privates as the resolution path for companies that floated too high.