In March of this year, Block became the center of some negative attention, when famed short-seller Hindenburg Research issued a statement accusing the company of inflating its user numbers for Cash App, and enabling fraudulent transactions.īlock aggressively refuted the claims, saying it had verified 44 million of its 51 million monthly users. This product is still called Square to this day.īesides TIDAL, Block also owns Cash App, a person-to-person payments app, the buy-now-pay-later platform Afterpay and web hosting service Weebly. In 2017, US wireless company Sprint bought a 33% stake in the company for $200 million, implying a roughly $600-million valuation for the DSP at that time.īlock Inc was founded by Dorsey and entrepreneur Jim McKelvey in 2009, Originally called Square, it offered a payments platform for small and medium sized companies that enables them to accept a variety of digital payment systems. TIDAL has since expanded to 61 countries, and boasts a catalog of 80 million tracks. The service marketed itself as the first artist-owned streaming service.

Among other musicians to have taken a stake at that time were Kanye West, Beyonce, Rihanna, Nicki Minaj, Arcade Fire and Calvin Harris. In 2015 it was bought by a group of prominent musical artists led by Jay-Z. TIDAL was originally launched in 2014 by Swedish firm Aspiro, launching that year in the US, UK and Canada. In its 10-Q filed on November 4, 2021, Block disclosed that, after adjustments, it ultimately paid $237.3 million for an ownership interest of 86.23%.”

“Block closed the deal on April 30, 2021. The filing adds: “In an 8-K filed two days later, the Company reported that it would pay consideration of approximately $306 million, subject to adjustments, for an ownership stake of approximately 87.5%. Nonetheless, Block’s board approved the acquisition, and the company closed the deal in April 2021.Īccording to the recent court document, the company “announced the deal on March 4, after which its stock price decreased by 7%”. In answers to questions raised by Block’s board members, the transaction committee said that there was “substantial push back” from senior Block executives to the idea of buying TIDAL, and that “neither of Block’s two business unit leaders, Alyssa Henry and Brian Grassadonia, were advocating for the transaction,” according to the ruling. The transaction committee also noted that the company had accrued $127 million in liabilities, mostly from unpaid royalties to record labels. West severed his ties with TIDAL in 2017, alleging the company owed him $3 million. The company also had a public falling-out with Kanye West, who was an initial shareholder in TIDAL and with whom the DSP had an exclusive streaming contract. Among them was an investigation in Norway – the country where it was initially created – over allegations of “artificially inflating its streaming numbers”, the court document notes. The transaction committee also reported on a number of problems that TIDAL was undergoing. “A board comprised of a majority of disinterested and independent directors is free to make a terrible business decision without any meaningful threat of liability, so long as the directors approve the action in good faith.” Carter personally extended a $50 million loan to TIDAL in 2020.”

It added: “TIDAL had logged multimillion-dollar losses for each of the preceding ten quarters. “By mid-2020, TIDAL had amassed only 2.1 million paying subscribers, which compared poorly to competitors like Spotify ( 138 million paying subscribers), Apple Music ( 60 million), and Amazon Music ( 55 million),” the ruling stated. In the months to come, the transaction committee would file a series of reports about TIDAL, reporting on what Chancellor McCormick’s ruling called an “unsuccessful” attempt by TIDAL to break into the music streaming business.

Who owns tidal music streaming