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Square enters $297M agreement to acquire majority stake in Tidal

Square enters $297M agreement to acquire majority stake in Tidal
Square enters $297M agreement to acquire majority stake in Tidal

Square, a financial services company, has recently entered an agreement to acquire a majority stake in Tidal, a music streaming service owned by Jay-Z. As per reports, the company will pay $297 million in stock and cash to obtain the stake. Following the stake acquisition, Jay-Z will join the board of Square.

A year after the launch in 2014, Tidal was acquired by a consortium of artists like Jay-Z for $56 million. Over the past months, the company has been witnessing an intense competition from rival companies such as Spotify. The recent agreement will also enable it to expand its service portfolio. It has shifted from delivering mobile payment services to a full suite of tools for small businesses such as in-house banks. This bank was launched earlier with an aim to provide business loans & deposit products to the sellers who deploy its card reader as well as other point-of-sale services.

Furthermore, the deal builds on the robust relationship shared between Jay-Z and Jack Dorsey, Twitter’s CEO and Square’s Founder. In addition, they have collaborated on a bitcoin development fund. Dorsey has reportedly cited that the recent merger between the two companies with differentiated service offerings was geared towards discovering new ways for various artists to support their work.

Square is targeting towards witnessing the growth of its artists by leveraging its industry know-how and assisting them via the Cash app, Dorsey added. The two companies will join forces to create at least a slight impact on the artists by increasing their fanbases as well as catering to other critical needs.

People with knowledge of the matter have reported that the latest agreement is a part of the ongoing strategy of Square to build ecosystems around merchants, sellers, & consumers. By acquiring Tidal, the payments company will be able to expand its user base by including fans, artists, and musicians.

Square’s shares recently recorded a drop of over 7% in early trading after the stake acquisition announcement.

Source credit:

https://edition.cnn.com/2021/03/04/tech/square-tidal/index.html

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for newsorigins.com, spanning the verticals of business, finance, and technology.