You probably know Jack Dorsey as the co-founder and CEO of Twitter. but! As we detailed last week, about 85% of Jack’s total assets are actually thanks to his other company, Square. Square is a mobile payment processing company. If you’ve ever bought lunch from a food truck or shopped at the flea market, you’ve probably swiped your credit card in the square widget attached to the merchant’s iPhone. And if you think it is a small business, then you are wrong. For perspective, Twitter has a total market capital of $ 56 billion. Square has a market cap of $ 103 billion. Jack has about 13% Square and 2% less than Twitter. And through Square, Jack Jay-Z owns the majority of music streaming service Tidal. And with the purchase he is also about Jay-Z as a fellow Squire board member!
Earlier this morning Jack announced (via a series of tweets) that Square was acquiring majority ownership in Tidal “Through a new joint venture, the original cast became the second largest group of shareholders, and J. -Z Square joins the board. ” The reported purchase is valued at $ 297 million in cash and stock.
“Square created an ecosystem of tools for vendors and individuals, and we will do the same for artists. We will be working on completely new listening experiences to bring fans closer together, simple integration to merch sales, modern collaboration tools and new complementary revenue streams… Economy for artists is like working for Square Which is done for sellers.“
Here’s a picture of Jack showing him and Jay-Z at the end of their Twitter announcement in an intense red-wine-soaked conversation about the cast’s future:
I am grateful for Jai’s vision, knowledge and leadership. I knew that TIDAL was something special as soon as I experienced it, and I am inspired to work with it. Now it will help lead our entire company, including the cellar and cash app as soon as the deal is closed. https://t.co/YRfYjcWJQx pic.twitter.com/xBtq2xfwue
– Jack (@jack) March 4, 2021
In addition to its ubiquitous white credit card readers, Square Cash also operates the app, a payment service that allows consumers to transfer and store money as they would in a bank. Back in August Cardi B and Megan Thea Stallion promoted the release of their single “WAP” by giving fans $ 1 million through the Cash app. All fans were to message him on Twitter with their Cash App account tag, cleverly called “Cashtag”.
I don’t know much about the Cash app, but I’ll bet my life that fans who have sent Cardi B and Megan Thea Stallion have also easily signed their CashTags to get future promotions from the cast Have done. So the artists are not actually paying $ 1 million. They are spending $ 1 million to create a new type of mailing list of their most loyal and eager fans. That list and data is worth more than $ 1 million over time.
I can take a picture of a future where, instead of putting an album on Spotify for the day they release, they make it available to a limited number of fans on the Cash app for $ 5. Then six months later it will go free on Spotify.
A long strange journey for the tide
In January 2015, Jay-Z paid $ 56 million for a Swedish streaming company called Espiro. At that time Espiro operated two streaming services; YMP and tide. The YMP was soon discontinued. Tidal’s value proposition at a time of high streaming quality for users and a large royalty share for artists. When the deal was announced, Tidal and WiMP were reported to have 500,000 subscribers.
A few months after their takeover, in March 2015, Jay-Z held a slightly awkward press conference where some of the world’s most famous musicians – Madonna, Ashar, Rihanna, Kanye West and Deadmau5 and Jay Jay announced themselves. A new partnership. During the presentation, Jay and his teammates set out to create a new stage in which the cast was first cast. It was also revealed that each of Jay’s 15 partners was gifted a 3% equity stake in Jowar. He owns 45% of the company. J and a consortium of bankers owned the remaining 55%.
The next few years were bumpy.
The vast majority of music consumers used Spotify, YouTube or Apple Music for their listening needs. I have yet to hear of or meet a person who uses Tidal.
In April 2016, J sued Jowar’s previous owners for $ 15 million, alleging they were estimating the service’s customer numbers. According to the lawsuit, the tide did not have nearly 500,000 customers, and the business was in “very poor” shape, as he was led to believe.
Tidal lost a ton of money during the first few years of operation under Jayal-Z.
In January 2017, J sold 33% of Tidal to Sprint for an undisclosed amount.
By the middle of 2010, Jai and Kanye were strangling each other over the tide, which eventually ended with the jumping ship.
By the end of 2017, reports were saying that Tidal was out of cash and its losses nearly doubled to $ 44 million for the year after being on the verge of failure.
The fast-forward and tidal wave is currently entering a new life stage under Jack Dorsey and Squire.
Given how much money it has lost over the years and the fact that Jay has already sold a large portion of his stake to Sprint, there is no possibility that all the money is in his pocket or in the pockets of his 15 artist partners Are going It seems to have a more “Exeter” status – where the company is being acquired primarily to appoint officers. In other words, Square is basically paying $ 300 million to Jay-Z’s board of directors with a plus 15 as the equity holders running among the world’s best-known musicians.