Morningstar

Square to Buy Majority of Tidal; Jay-Z to Join Board

We think much of Cash App’s recent success has come from Square’s efforts to build out ancillary services on the platform, and this could provide another tie-in.

Securities In This Article
Block Inc Class A
(SQ)

Narrow-moat Square SQ announced that it will buy a majority stake in music platform Tidal for $297 million in cash and stock. As part of the deal, Tidal board member and shareholder Jay-Z is expected to join Square’s board. We think much of Cash App’s recent success has come from Square’s efforts to build out ancillary services on the platform, and this could provide another tie-in. However, in this case, the strategic connection seems fairly weak, and Tidal is expected to continue to operate independently. Square's comments on the deal suggest that the acquisition will provide a further entry point to serve the music industry, so there could be some opportunities on the acquiring side as well. Still, the deal is much too small to have a material impact on our $78 fair value estimate, which we will maintain.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

More in Stocks

Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue

Estee Lauder, Kraft Heinz, and Dollar General are our top consumer defensive stocks.
Erin Lash, CFA

Industrials: Many Stocks Overvalued After Q3 Outperformance

Our top stocks in this sector are Chart Industries, Wesco, and CNH Industrial.
Brian Bernard, CFA, CPA

Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities

In this sector, our favored stocks are Albemarle, Dow, and FMC.
Andrew Bischof, CFA and Travis Miller

About the Author

Brett Horn, CFA

Senior Equity Analyst
More from Author

Brett Horn, CFA, is a senior equity analyst, AM Financial Services, for Morningstar*. He covers P&C insurers and payment companies. He also developed the insurance valuation model by the equity research team.

Before joining Morningstar in 2006, Horn worked in the banking industry for about a decade, most recently as a commercial loan officer for First Bank, where He was responsible for underwriting loans and managing relationships with middle market clients. Before that, Horn worked for Mizuho Corporate Bank, where He managed loan portfolios and client relationships, primarily with Fortune 500 companies.

Horn holds a bachelor’s degree in business administration, with a concentration in finance, from the University of Wisconsin. Horn also holds a master’s degree in business administration from the University of Illinois. He also holds the Chartered Financial Analyst® designation.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Sponsor Center