Shares of mobile payments company Square rose as much as 64 percent in their market debut, offering hope to tech startups looking to go public.
Square's shares touched a high of US$14.78 in early trading on today, valuing the company at US$4.77 billion.
While the stock popped at the opening, the IPO price of US$9 per share was well below the expected range of US$11-US$13.
The steeply discounted price had raised questions about what it could mean for so-called "unicorns" - start-ups worth at least US$1 billion - that may want to go public.
"The shares will do well given they have been priced far below their range and because there's real opportunity for new startups," said James Angel, associate professor of finance at Georgetown University's McDonough School of Business.
The payment processor's IPO raised US$243 million after the company's shares were priced at US$9 each.
The debut comes at a time when slowing global growth and uncertainty about the timing of a US interest rate hike have kept investors on edge.
As of yesterday, 35 of 144 US IPOs this year had to be priced below the expected range.
Competition is also intensifying in the mobile payments market, with Apple launching its Apple Pay service, Amazon exploring in-store payments, and start-ups such as Stripe entering the fray.
Square, which has been investing heavily, reported a loss of US$131.5 million in the first nine months of the year after losing US$117 million a year earlier, but revenue rose 49 percent to US$892.8 million.
"Square's financials leave much to be desired. But there's still a lot to like here, and think the success of their debut will say a lot about the current IPO environment," said Brian Hamilton, chairman of data firm Sageworks.
CEO Jack Dorsey told CNBC that Square broke even in the second quarter this year, although it was unclear what metric he was using.
Still, investors wonder how much time he will be able to devote to Square as he tries to boost user growth at Twitter, his other venture. Twitter's shares were up 1.7 percent.
San Francisco-based Square sold 25.7 million class A common shares in the offering.
Dorsey owns 21.9 percent of Square following the IPO and is the company's biggest shareholder.
Square was founded in 2009 after co-founder Jim McKelvey, an artist, realised how difficult it was for small businesses to accept card payments when he could not do so at an art show.
The company has since also moved into other services, such as lending and providing invoice software.