Dorsey had additionally donated $10 million to Carter’s nonprofit in May 2020, and the pair created and funded an endowment the next year dedicated to “bitcoin development in India and Africa.” The court decision details Dorsey and Carter’s friendship in hilarious detail, noting they “share interests in cryptocurrency and philanthropy” and were “spotted vacationing together in Hawaii” just days after Block formally started the process of acquiring Tidal. federal lawsuit brought against Tidal by artists who said they were owed royalties.ĭuring the process, the transaction committee also discovered that Dorsey was “the sole Block management member in support of the acquisition.” But the deal moved forward anyway in March 2021. At a follow-up meeting the next month, the transaction committee discussed Tidal's low subscriber numbers, the fact it "had recorded multimillion-dollar losses in each of its previous ten quarters," Spotify's dominance in the streaming space, and "potential risks,” like the Norwegian criminal probe and U.S. The plaintiffs said that a "transaction committee" at Block met to discuss the Tidal acquisition for only 35 minutes in September 2020. “It seemed, by all accounts, a terrible business decision,” the judge stated in his ruling Tuesday. Dorsey had, in fact, suggested Block, then called Square, acquire Tidal during a videoconference meeting he took from the Hamptons in 2020. The judge notes that the idea to buy Tidal had come to Dorsey while he was “summering” with Jay-Z’s family in the Hamptons.
Block had faced a shareholder suit from a pension fund as a result of the $300 million deal to acquire a majority stake in Tidal, which came as the streaming company was “failing financially” and facing a criminal investigation in Norway related to inflated streaming numbers.Īt particular issue was Dorsey’s burgeoning friendship with Jay-Z, and whether Dorsey and Block's board was within its right to make a major acquisition in part because of that friendship even if the business reasoning did not make sense.
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