Four years ago, I opened Tidal and listened to “4:44,” Jay-Z's 13th studio album. I revisited the record two weeks ago because of the new Square-Tidal venture. The album still sounds good and has such a singular sound. Many know this record as the first Jay Z project released after Beyoncé’s “Lemonade,” while others recognize it as a “black capitalist manifesto.”
Either way, it’s one of my favorites and one of the most contemplative albums we’ve received from Jay Z. The confessional vibe over the sympathetic beats from No I.D. reminds you of the vulnerability that Kanye West and Drake made standard. He finds ways to discuss art, productive labor, putting capital into motion, and cultivating land and wealth.
The album features verses covering topics ranging from his legacy to the beef between streaming services for the rights to Prince’s catalog. In “The Story of O. J.,” which is almost impossible to paraphrase—you have to listen to every word—Jay uses the song to talk about the upward mobility of Black people and how once O.J. forgot where he came from, he began to think that success could make him priceless.
When he raps about owning Basquiat’s, the tone has a different vibe. He’s not bragging. It’s more about generational wealth and experiencing the joy that comes from leaving behind valuable things for your children. Jay Z deconstructs his worldview and thinks about the merit of his work, his faith in wealth, and what's worth valuing anyway.
In a way, the album has an energy that reminds you of “The Fire Next Time,” where James Baldwin shares messages with his nephew about the world and his identity. The album’s message about amassing wealth for future generations sounds more interesting after seeing Jay-Z partner with Square, a top ten fintech company.
After purchasing Tidal with other artist owners in 2015 for $56 million, Jay-Z is now selling a majority stake for $297 million in cash and stocks to Square and taking a seat on the Board. Side Note: Jay-Z released the “March 4th” playlist on Tidal, which opens with “Victory Lap” from Nipsey Hussle and includes songs like “Provider” by N.E.R.D. and “F.U.B.U.” by Solange. In “Interlude: No Limit,” the track tells a brief story from Master P about learning business strategy as a young boy and the origins of the name “No Limit." The playlist celebrates the venture between Square and Tidal, more agency for artists, and the entrepreneurial spirit.
It’ll be interesting to watch the progress of Square as Jay Z will probably bring a fresh perspective to the Board and continue to keep underserved communities in mind. Due to its recent acquisition of Tidal and comprehensive money management services, Square is poised to become the next big thing. Square is known for building and developing fast-growing products internally. Cash app, a subsidiary of Square with 36 million users, started as a smaller internal project, and now it generates almost half of Square's gross profit. Cash app competes with other money management apps like Venmo and Zelle.
The app offers features like loan payments, direct deposit to receive stimulus payments, stock trading, bitcoin management, and a debit card. To continue to grow, the company plans to buy Credit Karma’s business for $50 million in cash. As the company continues to improve digital wallets, they face stiff competition. Square is up against consumer finance companies in the small business market, including PayPal Holdings, Shopify, and the well-funded Stripe, which will have an attractive public offering sometime this year.
However, Square shares recently tripled in price, leading to a market value of over $100 billion. The company saw the potential of Bitcoin, the currency of the Internet, early on and invested hundreds of millions of dollars into it. Most of the company’s success comes from these transactions, especially since Bitcoin has recently been trading above $50K after the $1.5 billion investment by Tesla. Square made $217 million and $1.8 billion in revenue from bitcoin in 2019 and 2020, respectively.
Part of the secret sauce has been cross-selling more services to its existing pool of merchants. Lately, every other fintech is becoming a bank, but capital lending is the logical extension of payment vendors. Square has a unique advantage because the data surrounding sellers’ transaction histories will help facilitate loan underwriting and payments. Square would also have a nearly real-time view of business performance and revenue stream, making it easier for the company to use this pulse check to manage risk.
This venture appears to be about the economic empowerment of artists and music culture, but it has the potential to be a lot more. Music and crypto are only two of the many avenues that Square can take. After creating a Bitcoin trust for development in Africa and India, C.E.O. Jack Dorsey and Jay-Z will continue to find more intersections between unique domains.
There is a slight chance that Square could be one of the following F.A.N.G. stocks and join the family of Facebook, Amazon, Netflix, and AlphAlphabet'sgle in stature. At one point, Amazon only sold books before it became what it is today. Square could follow a similar approach and handle many online transactions. If we are witnessing the birth of a new paradigm, keeping an eye on Square is a good idea. The benefits could be significant for both musicians and investors.