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Square’s hardware lead Jesse Dorogusker is set to assume the role of interim head of Tidal and Jay-Z will be joining the board of Square Inc (SQ).
American financial services and mobile payment company, Square Inc (NYSE: SQ) announced its acquisition of Tidal, a high-definition audio and video streaming service bought by Jay-Z and other artists back in 2015. Per the terms of the purchase, the payment firm, led by Jack Dorsey will be paying $297 million in cash and stock for a “significant majority ownership stake.”
The other owners including Coldplay, Rihanna, Daft Punk, and Madonna will also maintain their part ownership of the company.
Tidal, as other subsidiaries of Square, will operate independently and there are insinuations that the deal could help popularize blockchain or other new approaches to storing and buying online media for the streaming platform.
“Square is acquiring a majority ownership stake in TIDAL through a new joint venture, with the original artists becoming the second largest group of shareholders, and JAY-Z joining the Square board. Why would a music streaming company and a financial services company join forces?!” Jack Dorsey announced the deal via his Twitter handle, ending with the question to which he later provided answers to.
Jack has been at the forefront of championing blockchain innovations and decentralized applications. With the acquisition of Tidal, the tech guru said he wants to do to artists what he used Cash App to do to sellers.
“Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us,” tweeted Dorsey. “Square created ecosystems of tools for sellers & individuals, and we’ll do the same for artists. We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools, and new complementary revenue streams.”
As promising as the deal appears to be, the shares of Square responded in antagonism amid a broad sell-off in tech stocks. SQ closed Thursday’s session with a loss of 6.74% to $218.41. A further plunge is charted in the pre-market by an additional 2.02% dip.
Jay-Z to Join Square Inc’s Board Following the Tidal Acquisition
Though there are plans for the outfit to operate independently, The Verge reports that Square’s hardware lead Jesse Dorogusker, is set to assume the role of interim head of Tidal, and Jay-Z will be joining the board of Square Inc (SQ).
“I said from the beginning that Tidal was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers,” said Jay-Z in a press statement. “Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about Tidal’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!”
Both Square and Tidal have an enormous task ahead to get the platform up to compete with rivals such as Spotify. The company is reported to lag in terms of paying customers or subscribers, with some royalties due to artists yet unpaid.