Wix.com (NASDAQ:WIX) has been helping consumers and businesses build websites since 2006. Seven years later, in 2013, the company went public and investors have been able to share in its success. One of its competitors, Squarespace (NYSE:SQSP), has been doing business since 2004, but only made the move to go public this year. Should Wix investors be worried? On a Fool Live episode recorded on May 12, Fool contributors Toby Bordelon and Brian Stoffel discuss.
Toby Bordelon: I was looking at Wix last night, I noticed that Squarespace has filed for an IPO recently so they're coming public. Sort of similar in some ways. Do you think they're a threat to Wix or we're not going to care too much about that?
Brian Stoffel: I think we're not going to care too much for that, but here's what I mean by that Toby. Going public puts it on our radars, right? It is very unlikely that Squarespace going public is going to magically put it on the radar of someone looking to build a website. My point being Squarespace has been there for a while and Wix is doing just fine, so I don't think it going public changes anything. There's always going to be competition. But the fact of the matter is they've got tens of millions of people who are using Wix for free and only a small percentage have upgraded a premium so they've got this huge stable of people that they can get to upgrade if they're able to do that. That's Wix's job to be able to do that for shareholders, so I wouldn't be particularly worried.
Bordelon: Yeah, I think that's a great point about them being around for a while too, I think first come across Squarespace more than a decade ago, two decades ago.
Bordelon: Yeah. I think it just reinforces the idea that when you look at companies like this, you want to be aware of the private market. Eventually, someone will come public, but it doesn't necessarily change, like you said, what's going on in the market in general.
Stoffel: Exactly because people like you and me look, I've started a website on Wix however I haven't touched it and like years and I don't do anything on it, but it doesn't matter to me if Wix is public or not. I just know about it.