Jack Dorsey stands by afterpay deal despite BNPL bloodbath – Internet Cloning

Jack Dorsey stands by afterpay deal despite BNPL bloodbath – Internet Cloning

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In the earnings call, Block said Afterpay’s loan losses improved slightly despite intense competition and continued focus on managing bad debt risk in a slowing economy.

Block shares fell 5.5 percent on the ASX to $119.10 after the company’s overall transactions came in weaker than expected.

Dorsey’s planned development of a financial “super app” — a term sometimes used to describe China’s WeChat Pay — aims to allow the company to offer customers a range of products through a single offering.

“It really has to do with how much utility we offer, so we’re not just focusing on one thing like peer-to-peer transactions or investing or bitcoin or lending, it’s a place, a place where you can do all those things. ,” Dorsey said.

“We see competitors in other industries in other areas and in other countries that have done this very well and are sometimes referred to as super apps or neo-banks. We believe this is the right strategy for the long term.”

While Block’s initial acquisition of Afterpay a year ago was valued at $29 billion ($39 billion), the deal’s value by closing had fallen due to price declines.

Block’s accounts show that the company paid $13.8 billion in stock for Afterpay when the transaction closed in January of this year, and $11.6 billion of what it acquired was classified as goodwill.

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The company’s chief financial officer, Amrita Ahuja, responded to a question about Block’s ongoing accounting of the goodwill in Afterpay by saying the company regularly assesses the value.

Block reported a net loss of $208 million for the June quarter, while the company’s adjusted earnings before interest, taxes, depreciation and amortization were $187 million. Afterpay contributed $208 million in revenue.

RBC Capital Markets analyst Daniel Perlin said Block’s revenue performance is encouraging but highlighted a slowdown in Block’s gross payment volume growth.

Meanwhile, a Fitch Ratings report on Friday forecast growing challenges for the BNPL sector, citing rising US unemployment and the fading impact of the government’s COVID-19 stimulus payments.

The Market Recap Newsletter is a summary of the trading day. Get it every useday afternoon.

https://www.smh.com.au/business/banking-and-finance/jack-dorsey-stands-by-afterpay-deal-despite-bnpl-bloodbath-20220805-p5b7ji.html?ref=rss&utm_medium=rss&utm_source= rss_business Jack Dorsey stands by afterpay deal despite BNPL bloodbath

Jack Dorsey stands by afterpay deal despite BNPL bloodbath – Internet Cloning

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