Jack Dorsey is most likely best known to you as the co-founder and CEO of Twitter. But! As we explained last week, Jack’s OTHER company, Square, is actually responsible for about 85% of his net fortune. A mobile payment processing company is called Square. If you’ve ever bought lunch from a food truck or shopped at a flea market, you probably swiped your credit card in a Square widget connected to the merchant’s iPhone. And you are mistaken if you believe that is a small business. To put things in context, Twitter has a $56 billion market capitalization. The market value of Square is $103 billion. Jack has less than 2% of Twitter and approximately 13% of Square. Jack is also poised to acquire the majority of Jay-music Z’s streaming service Tidal through Square. Jay-Z will be promoted to the Square board of directors as a result of the purchase.
Earlier this morning Jack announced (via a series of Tweets) that Square was acquiring a majority ownership in Tidal. According to the rumored pricing, it will cost $297 million in cash and stock.
“We’ll establish similar ecosystems of tools for artists like Square did for retailers and individuals. We’ll work on brand-new audio experiences to connect fans, straightforward merch sales integrations, cutting-edge collaborative tools, and new complementary revenue streams. Similar to what Square has done for retailers, making the economy work for artists is a good thing.”
Here is a picture of Jack that was posted at the conclusion of his Twitter statement, showing him and Jay-Z discussing the future of artists while sipping on a deep red wine:
I can picture a future where instead of putting an album on Spotify for free the day it’s released, artists would make it available to a limited number of fans on Cash App for $5. Then it would become available on Spotify for free six months later.
A Long Strange Journey For Tidal
Jay-Z invested $56 million in the Swedish streaming service Aspiro in January 2015. WiMP and Tidal were the two streaming services that Aspiro ran at the time. WiMP was quickly shut down.
Jay-Z announced a new partnership at a press conference in March 2015, just a few months after his acquisition, while standing shoulder to shoulder with some of the most well-known musicians in the world, including Madonna, Usher, Rihanna, Kanye West, and Deadmau5. Jay and his colleagues outlined their strategy for developing a new platform that prioritizes artists throughout the presentation. Additionally, it was made public that each of Jay’s 15 business partners received a gift of a 3% stock stake in Tidal, which accounts for 45% of the company.
(Image courtesy of Getty Images/Larry Busacca)
The vast majority of music listeners were content to satisfy their listening demands by using Spotify, YouTube, or Apple Music. I have yet to hear of or meet one person who uses Tidal.
In April 2016 Jay sued the previous owners of Tidal for $15 million, alleging they over-estimated the service’s subscriber count. The lawsuit claims that Tidal had many fewer subscribers—nearly 100,000—and that its financial situation was “far worse” than he had been told.
Jay sold Sprint 33 percent of Tidal in January 2017 for an unknown sum.
Jay and Kanye were at each other’s throats over Tidal by the middle of 2017, which led to Ye abandoning the project.
According to estimates, Tidal ran out of money before the end of 2017, when its losses had nearly doubled to $44 million for the year.
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