Jack Dorsey backs afterpay deals despite BNPL carnage

Block said on the earnings call that although competition was fierce, afterpay’s bad debt losses improved slightly, and that it remained focused on managing bad debt risk in a weakening economy.

Block shares fell 5.5% to $119.10 on the ASX as the company’s total trading volume was weaker than expected.

Dorsey’s planned financial “superapp” (sometimes used as a term for WeChat Pay in China) is designed to offer customers multiple products in one service.

“This has a lot to do with the amount of utility that we provide, so we don’t just focus on one thing: peer-to-peer trading, investing, bitcoin, lending. You can,” Dorsey said.

“We see peers in other sectors in other industries, sometimes called super apps and neobanks, and other countries that are doing it very well. I believe,” Dorsey said.

Block’s initial acquisition of Afterpay was valued at $29 billion ($39 billion) when it launched a year ago, but a decline in the stock price had dented the value by the time the acquisition was completed. rice field.

According to Block’s account, the company paid $13.8 billion in equity in closing the Afterpay acquisition in January of this year, of which $11.6 billion is classified as goodwill.


When asked about Block’s ongoing accounting for Afterpay’s goodwill, Amrita Ahuja, the company’s chief financial officer, said the company regularly evaluates its value.

Block reported a net loss of $208 million in the June quarter, while the company’s adjusted earnings measure before interest, taxes, depreciation and amortization was $187 million. Afterpay says he made $208 million in revenue.

RBC Capital Markets analyst Daniel Perlin said the bloc’s earnings trends were encouraging, but highlighted slowing growth in total payouts for the bloc.

Meanwhile, a Fitch Ratings report on Friday predicted increasing challenges for the BNPL sector, pointing to rising unemployment in the US and weakening effects of COVID-19 stimulus measures from the government.

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Jack Dorsey backs afterpay deals despite BNPL carnage

Source link Jack Dorsey backs afterpay deals despite BNPL carnage

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