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Despite Low Priced IPO, Square Inc. Still Took Many By Surprise

 

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Finally, after long talks for months, SQUARE INC (NYSE:SQ) the San Francisco based payments and financial services company, went public on  Wednesday, 18th November 2015 and it definitely took many by surprise!

Square Inc. sold shares in it’s initial public offering for $9 per share, giving the company a market capitalization of $2.9 billion, a far below the $6 billion valuation it had earned from private investors. (More on the funding round)

Square and a selling stakeholder (who?) offloaded 27 million shares –  25,650,000 shares of the Company’s  Class A common stock and the selling stockholder as named in prospectus 1,350,000 shares of  the company’s Class A common stock. The company raised $243 million in the process.

That however, was not the initial plan! So what happened? It was estimated that the initial public offering price per share of  the company’s Class A common stock would be be between $11.00 and $13.00. Nevertheless, the stock price went up  as high as $14.78 once ordinary investors could buy the shares on the open market on Thursday. After trading over 47 million shares, the stock finally ended the day at $13.07, which was an a approximate over 45% gain! In a Interview with CNBC, Jack Dorsey, the CEO of both Square Inc and Twitter Inc, showed optmism and added it was not just about  the company’s trading stock but about growing the business.

There is no denying that, many who were doubtful because of the recent market conditions for IPOs. This was quite unusual for many investors and  among experts like professor Jay R. Ritter, of  University of Florida  who has been tracking IPOs for years. ( Jay R. Ritter also writes  about investing, with a focus on initial public offerings on Forbes)  For others, this was supposed to be a sign of doom!

So, what might the returns for the investors who got in early look like?  According to Business Insider, investors who valued the company at $6 billion last year also got an absolute deal! However, according to Bloomberg View, for a certain group investors, it was indeed a loss! And for others who had negotiated for themselves a “ratchet,” the game was fair as it had been agreed!

China Cracked down $64 Billion ‘Underground Banking’ Money Laundering Activities And Illegal Transfers

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Currently, china is boosting efforts to fight corruption and to curb capital out flow. From the news, Chinese officials are said to have cracked down the country’s biggest-ever underground bank which handled illegal foreign exchange transactions worth 410 billion yuan ($64 billion) –report  by People’s Daily

According to Bloomberg, so far more than 370 people have been arrested and other are facing lawsuits and criminal charges. The Chinese authorities started the operation of raiding underground banks in April. Since then, over 170 cases underground banking and money laundering activities and illegal transfers  totaling more than 800 billion yuan ($125.34 billion) have been uncovered. So far . Police have shut down 37 banks. More than 300o bank accounts a´have been frozen. (Source-RT)

The Genesis?  The case was traced to one leader of the Zhejiang network was a man named Zhao Mouyi, who transferred over 100 billion yuan overseas using 850 different bank accounts and a dozen Hong Kong front companies. It is reported that police took nearly a year to sort through over 1.3 million suspicious transactions. (Source-Star Tribune)

Apparently, the Chinese citizens are officially limited to converting $50,000 of yuan per year! So how do the Chinese send billions abroad  for activities such as buying homes? Get the details on China’s Money Exodus here

1,111 Carat Diamond Unearthed in Botswana by Lucara Diamond Corp

Lucara Diamond Corp. (TSX:LUCa Canada based diamond producer, found a 1,111 gem-quality diamond in south lobe of Lucara’s Karowe Mine in Botswana.

According to the company, the diamond measures 65mm x 56mm x 40mm and it’s is the  world’s second largest gem quality diamond ever recovered. (The 3,106 carats Cullinan Diamond is the largest diamond ever found and it was discovered in January, 1905 at the Premier Mine in South Africa. More details here)

It was also a good day for the company’s financials. The company’s stock went up with more than 30% or $0,49, hitting $ 2,10 per share (More about the financials at Barchart.com or at the company’s stock information website.

In a press release, the company’s  President and CEO, William Lamb, comments are quoted as follows:

“…This historic diamond recovery puts Lucara and the Karowe mine amongst a select number of truly exceptional diamond producers. The significance of the recovery of a gem quality stone larger than 1,000 carats, the largest for more than a century and the continued recovery of high quality stones from the south lobe, cannot be overstated. Our focus on mining the south lobe, which is delivering value beyond expectation, has been perfectly timed with the commissioning of our recent plant modifications, enabling the recovery of these large, high quality exceptional diamonds…”  – Company’s news release

What’s the value of the stone? According to an article by Bloomberg, Edward Sterck, a London-based analyst at BMO Capital Markets, stated in a report that estimating the value such an extra ordinary gem depends various characteristics such as colour, clarity, cutting and polishing. More details about the stone’s value can be found here. (source Bloomberg)

In other news, Lucara announced that it has recovered  two  more exceptional white diamonds-an 813 carat stone and a 374 carat stone  from the Karowe Mine in Botswana.(More details on Barchart.com)- It’s indeed a great week is in Botswana, but according to the Guardian, the company will not be putting the three stones in the market immediately.

Lucara Diamond Corp’s two key assets are the Karowe mine in Botswana and the Mothae project in Lesotho. The Karowe Mine is located in north-central Botswana and The Mothae Diamond Project is situated in the Maluti Mountains of Lesotho ( More details about the assets ownership and area coverage here: Source Dakota Financial News)