Connect with us

Business

Jack Dorsey Outlines Block’s Bitcoin-centric Future: ‘No Longer Just a Payments Company’

Rebekah Fuller

Published

on

In this article

SQ

Twitter CEO Jack Dorsey addresses students during a town hall at the Indian Institute of Technology (IIT) in New Delhi, India, November 12, 2018.
Anushree Fadnavis | Reuters

Block executives no longer want the firm to be seen as a payments pure play.

The San Francisco-based company held its first investor day in five years Wednesday, where the C-suite made their case to Wall Street that the money app, along with its crypto and music-streaming businesses, should be valued as an “ecosystem” instead.

“Calling Block a payments company is like calling Amazon a bookseller,” CFO Amrita Ahuja told CNBC in a phone interview. “We’ve grown in so many different ways across multiple dimensions.”

CEO and co-founder Jack Dorsey, who formerly ran Twitter, kicked off Wednesday’s presentation with a keynote on the evolution of Block and bitcoin’s role in it going forward. It’s “difficult” to fit a company like Block into a single category, he said.

“We are no longer just a payments company,” Dorsey said during the livestreamed event. “A lot has changed since our last investor day.”

Square was founded in 2009 and made its name by creating a credit card reader for mobile phones. The company expanded its scope to peer-to-peer payments and bank-like products with Cash App. The firm also acquired Afterpay and Jay-Z’s Tidal music streaming service. It also operates an FDIC-insured bank, and it offers stock and cryptocurrency trading.

Square’s corporate renaming to Block was meant in part to reflect that widening aperture and broader plans around crypto and blockchain.

While fintechs were among the best performers during the pandemic, Block and its peers have been pummeled in 2022 amid rising interest rates. ARK’s Fintech Innovation ETF, a basket of fintech names, is down about 55% year to date. Block itself has fallen roughly 45% in 2022.

Focus on profits

Still, Block’s CFO Ahuja said the company is outperforming its peers on profitability. Block released updated profit margins Wednesday — an increasingly important metric as investors prioritize the bottom line over growth.

Adjusted profit margins for Square side of the business last year were 34%, and they were 12% for Cash App, according to the company. On the pure growth side, Cash App now has 46 million monthly active users and 80 million annual actives as of March.

“Wall Street analysts are going to want to understand our growth profile, and our margin structure as a company — you can see based on our track record we are outgrowing the rest of the industry,” Ahuja said. “We operate in a large and growing market and are still taking share.”

Block closed a $29 billion deal to buy Australian fintech company Afterpay earlier this year as it expands into the installment loan market. The CFO highlighted the cross-selling opportunity with roughly 6% of its Cash App users also using AfterPay.

The lending sector has become popular for consumers and merchants, along with a surge in online shopping. It spreads out the cost of a larger purchase into four interest-free installments. Despite pushback from consumer watchdogs, Ahuja argued that it’s safer than a traditional card because consumers can’t take on additional loans if they miss a payment.

“Millennials and Gen Z’s are quite frankly skeptical of traditional forms of credit, that leave people in debt spirals,” she said.

Block also acquired Jay-Z’s music streaming business Tidal for roughly $300 million last year — at the time a head scratcher for some payment analysts. Dorsey said it was a bet on the creator economy, which he argues will continue to grow as artificial intelligence removes “more and more of the need for mechanical work.”

“This will be a massive economy in the future, and we see an opportunity to be a big part of it, all using the tools and platform we’ve already built,” Dorsey said. “We acquired TIDAL because we saw that artists take a path similar to small businesses, and that there’s a significant gap in the market around artist tools.”

Dorsey’s case for bitcoin

As of the quarter ending in March, bitcoin still only made roughly 5% of Block’s gross profits. But executives are betting on crypto as a secular trend in which Block could be well positioned. Dorsey described it as the “open standard for global money transmission” and said it will allow Block’s “entire business to move faster globally.”

Block first started offering bitcoin trading through the Cash App, and the firm holds it on the company’s balance sheet as an alternative to cash. The world’s largest cryptocurrency is down more than 50% from its high and has struggled to regain its value so far this year.

Block’s crypto businesses have expanded to a bitcoin hardware wallet, a bitcoin-mining business, and an open-source business called TBD for developers. On top of that, there’s an independent, bitcoin-focused business within Block called Spiral.

Dorsey is not as bullish on other cryptocurrencies and said the “internet requires a currency native to itself, and in looking at the entire ecosystem of technologies to fill this role, it’s clear that bitcoin is currently the only candidate.”

“Its development may feel slow relative to other candidates, but that’s a result of the deliberateness required to preserve the attributes necessary for money storage and transmission,” Dorsey plans to say, according to a transcript of Wednesday’s keynote seen by CNBC. “The internet requires a currency native to itself, and in looking at the entire ecosystem of technologies to fill this role, it’s clear that bitcoin is currently the only candidate.”

Read More

Article: cnbc.com

Business

Ukraine’s Zelenskyy Tells Davos Supplies of Western Tanks Must Outpace Another Russian Offensive

Rebekah Fuller

Published

on

“Mobilization of the world must outpace a next military mobilization of our joint enemy,” Zelenskyy said via videoconference at the World Economic Forum in Davos, Switzerland.
Bloomberg | Bloomberg | Getty Images

Ukrainian President Volodymyr Zelenskyy on Wednesday said the supplies of Western tanks must outpace another Russian attack, reviving Kyiv’s push for the delivery of heavily armored vehicles amid fears the Kremlin could soon launch a new mobilization drive.

“Mobilization of the world must outpace a next military mobilization of our joint enemy,” Zelenskyy said via videoconference at the World Economic Forum in Davos, Switzerland.

“The supplying of Ukraine with air defense systems must outpace Russia’s next missile attacks. The supplies of Western tanks must outpace another invasion of Russian tanks.”

“The restoration of security and peace in Ukraine must outpace Russia’s attacks on security and peace in other countries. A tribunal for military crimes must prevent new ones,” Zelenskyy said.

His comments come amid speculation that Russian President Vladimir Putin may be poised to announce another mobilization round.

Analysts at the Institute for the Study of War, a U.S.-based think tank, said Tuesday that Putin may announce “a second mobilization wave in the coming days, possibly as soon as January 18.”

Zelenskyy and senior Ukrainian officials have repeatedly urged Western allies to provide heavy military vehicles and weapons in order to help defeat Russia’s nearly year-long onslaught.

Poland, France and the U.K. have recently pledged to send tanks to the Ukrainian military, while Finland says it could also donate a small number of German-made Leopard 2 tanks to help Kyiv protect itself.

Germany’s government said last week, however, that it has no plans to provide Ukraine with the Leopard 2 tanks.

‘Another horrible day for Ukraine’

Earlier on Wednesday, the three main figures of Ukraine’s Interior Ministry died in a helicopter crash in a suburb of the capital Kyiv.

The helicopter fell near a kindergarten and a residential building in Brovary with the cause of the crash being investigated.

Ukraine’s Interior Minister Denys Monastyrskyi, First Deputy Minister Yevhenii Yenin and the Interior Ministry’s State Secretary Yurii Lubkovych were among those killed in the crash.

Ukrainian authorities said at least 14 people died in the crash. Initially, reports indicated 18 people had died in the crash, although this has since been revised.

Zelenskyy described the incident as a “tragedy” and led delegates at Davos in a minute’s silence “to honor the memory of every person Ukraine has lost.”

Separately, Ukrainian first lady Olena Zelenska said at a news conference that it was “another horrible day for Ukraine.”

— CNBC’s Holly Ellyatt contributed to this report.

Read More

Original Post: cnbc.com

Continue Reading

Business

Holiday Sales Fall Short of Expectations, Set Stage for Tougher 2023 for Retailers

Rebekah Fuller

Published

on

Shoppers walk through the Urbanspace Holiday Shops at Bryant Park in New York, U.S., on Sunday, Dec. 12, 2021.
Gabby Jones | Bloomberg | Getty Images

Holiday sales fell short of industry expectations, as shoppers felt pinched by inflation and rising interest rates, according to data from the National Retail Federation.

Sales during November and December grew 5.3% year over year to $936.3 billion, below the major trade group’s prediction for growth of between 6% and 8% over the year prior. In early November, NRF had projected spending of between $942.6 billion and $960.4 billion.

The sales forecast excludes spending at automobile dealers, gasoline stations and restaurants.

The gains include the impact of inflation, too, which drives up total sales. The consumer price index, which measures the cost of a broad mix of goods and services, was up 6.5% in December compared with a year ago, according to the Labor Department.

For retailers, the shopping season’s results reflect the challenges ahead. As Americans continue to pay higher prices for groceries, housing and more month after month, they are racking up credit card balances, spending down savings and having fewer dollars for discretionary spending.

This is breaking news. Please check back for updates.

Read More

Source: cnbc.com

Continue Reading

Business

Microsoft, Amazon and Other Tech Companies Have Laid Off More Than 60,000 Employees in the Last Year

Rebekah Fuller

Published

on

In this article

AMZNMSFT

Microsoft CEO Satya Nadella speaks at the company’s Ignite Spotlight event in Seoul on Nov. 15, 2022.
SeongJoon Cho | Bloomberg | Getty Images

The job cuts in tech land are piling up, as companies that led the 10-year bull market adapt to a new reality.

Microsoft said Wednesday that it’s letting go of 10,000 employees, which will reduce the company’s headcount by less than 5%. Amazonfresh round of job cuts Wednesday that are expected to eliminate more than 18,000 employees and become the largest workforce reduction in the e-retailer’s 28-year history.

The layoffs come in a period of slowing growth, higher interest rates to battle inflation, and fears of a possible recession next year.

Here are some of the major cuts in the tech industry so far. All numbers are approximations based on filings, public statements, and media reports:

Microsoft: 10,000 jobs cut

Microsoft is cutting 10,000 employees through March 31 as the software maker braces for slower revenue growth. The company is also taking a $1.2 billion charge.

“I’m confident that Microsoft will emerge from this stronger and more competitive,” CEO Satya Nadella announced the move in a memo to employees that was posted on Microsoft’s website Wednesday. The move will reduce Microsoft’s headcount by less than 5%, and some employees will find out this week if they’re losing their jobs, he wrote.

Amazon: 18,000 jobs cut

Earlier this month, Amazonsaid the company was planning to lay off more than 18,000 employees, primarily in its human resources and stores divisions. It came after Amazon said in November it was looking to cut staff, including in its devices and recruiting organizations. CNBC reported at the time that the company was looking to lay off about 10,000 employees.

Amazon went on a hiring spree during the Covid-19 pandemic. The company’s global workforce swelled to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.

Alphabet (Verily): 230 jobs cut

Google parent company Alphabet15% of employees from its health sciences division Verily. Google itself has not undertaken any significant layoffs as of Jan. 18, but employees are increasingly growing worried that the axe may soon fall.

Crypto.com: 500 jobs cut

Crypto.com announced plans to lay off 20% of its workforce Jan. 13. The company had 2,450 employees, according to PitchBook data, suggesting around 490 employees were laid off.

CEO Kris Marszalek said in a blog post that the crypto exchange grew “ambitiously” but was unable to weather the collapse of Sam Bankman-Fried’s crypto empire FTX without the further cuts.

“All impacted personnel have already been notified,” Marszalek said in a post.

Coinbase: 2,000 jobs cut

On Jan. 10, Coinbasecut about a fifth of its workforce as it looks to preserve cash during the crypto market downturn.

The exchange plans to cut 950 jobs, according to a blog post. Coinbase, which had roughly 4,700 employees as of the end of September, had already slashed 18% of its workforce in June saying it needed to manage costs after growing “too quickly” during the bull market.

“With perfect hindsight, looking back, we should have done more,” CEO Brian Armstrong told CNBC in a phone interview at the time. “The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.”

Salesforce: 7,000 jobs cut

Salesforce is cutting 10% of its personnel and reducing some office space as part of a restructuring plan, the company announced Jan. 4. The company employed more than 79,000 workers as of December.

In a letter to employees, co-CEO Marc Benioff said customers have been more “measured” in their purchasing decisions given the challenging macroeconomic environment, which led Salesforce to make the “very difficult decision” to lay off workers.

Salesforce will record charges of $1.0 billion to $1.4 billion related to the headcount reductions, and $450 million to $650 million related to the office space reductions, the company said.

Meta: 11,000 jobs cut

Facebook parent Metamost significant round of layoffs ever in November. The company said it plans to eliminate 13% of its staff, which amounts to more than 11,000 employees.

Meta

The tech giant’s cuts come after it expanded headcount by about 60% during the pandemic. The business has been hurt by competition from rivals such as TikTok, a broad slowdown in online ad spending and challenges from Apple’s iOS changes.

Twitter: 3,700 jobs cut

Shortly after closing his $44 billion purchase of Twitter in late October, new owner Elon Musk cut around 3,700 Twitter employees, according to internal communications viewed by CNBC. That’s about half the staff. Since then, significantly more employees have quit after Musk changed some company policies around working from home and wrote that he expected all employees to commit to a “hardcore” work environment.

In a tweet on Nov. 4, Musk said there was “no choice” but to lay off employees, as the company was losing $4 milion per day.

Lyft: 700 jobs cut

Lyft announced in November that it cut 13% of its staff, or about 700 jobs. In a letter to employees, CEO Logan Green and President John Zimmer pointed to “a probable recession sometime in the next year” and rising rideshare insurance costs.

For laid-off workers, the ride-hailing company promised 10 weeks of pay, healthcare coverage through the end of April, accelerated equity vesting for the Nov. 20 vesting date and recruiting assistance. Workers who had been there for more than four years will get an extra four weeks of pay, they added.

Stripe: 1,100 jobs cut

Online payments giant Stripe announced plans to lay off roughly 14% of its staff, which amounts to about 1,100 employees, in November.

CEO Patrick Collison wrote in a memo to staff that the cuts were necessary amid rising inflation, fears of a looming recession, higher interest rates, energy shocks, tighter investment budgets and sparser startup funding. Taken together, these factors signal “that 2022 represents the beginning of a different economic climate,” he said.

Stripe was valued at $95 billion last year, and reportedly lowered its internal valuation to $74 billion in July.

Shopify: 1,000 jobs cut

In July, Shopify announced it laid off 1,000 workers, which equals 10% of its global employees.

In a memo to staff, CEO Tobi Lutke acknowledged he had misjudged how long the pandemic-driven e-commerce boom would last, and said the company is being hit by a broader pullback in online spending. The company’s stock price is down 78% in 2022.

Netflix: 450 jobs cut

Netflixtwo rounds of layoffs. In May, the streaming service eliminated 150 jobs after Netflix reported its first subscriber loss in a decade. In late June, Netflix announced another 300 layoffs.

In a statement to employees the company said, “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.”

Snap: 1,000 jobs cut

In late August, Snap announced it laid off 20% of its workforce, which equates to over 1,000 employees.

Snap

Robinhood: 1,100 jobs cut

Retail brokerage firm Robinhood cut 23% of its staff in August, after slashing 9% of its workforce in April. Based on public filings and reports, that amounts to more than 1,100 employees.

Robinhood CEO Vlad Tenev blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”

Tesla: 6,000 jobs cut

In June, TeslaElon Musk wrote in an email to all employees that the company is cutting 10% of salaried workers. The Wall Street Journal estimated the cuts would come to about 6,000 employees, based on public filings.

“Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas,” Musk wrote. “Note this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.”

Read More

Source Here: cnbc.com

Continue Reading

Trending

GQVT.com