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Seshu Kulkarni's avatar

Good analysis. There are a lot of good things about MQ but the valuation is still very rich when compared to SQ when it went public. MQ and SQ businesses are different -- one is on issuing side and the other on acquiring (at least when SQ started). SQ IPO’d @ $9 / $2.9B market cap. SQ’s TPV/NR in 2015 were 3X - 4X of MQ in 2020 and revenue concentration with Starbucks was also minimal. What SQ came out with is disruptive and transformational, which really isn’t the case with MQ. In fact, the CEO punted a little in a recent investor call with Citi where he was asked if MQ is disrupting or creating new market. There is a lot to like about MQ but think $10B valuation may seem reasonable in a frothy market which otherwise is fairly rich. As they get more into credit card business, there is a possibility for MQ to earn higher interchange revenue in value if not in % of IR.

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ALTAY TINAR's avatar

great analysis, thanks

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