Today, the ASX said farewell to a buy now, pay later (BNPL) monolith and ushered in the new kid on the block.
Block Inc. is one of the first big caps to hit the deck this year, taking Afterpay Ltd (ASX:APT) under its wing following one of the biggest mergers of the year.
You might remember a different name behind this deal: in August 2021, former Twitter boss Jack Dorsey’s Square, Inc. (NYSE:SQ) announced the US$29 billion Afterpay buy.
But Square recently shed its 2D form and went for something more multi-dimensional, changing its name to Block in early December.
Now, that entity has hit the local share market, broadening its presence on Australian shores — and taking a BNPL stalwart along for the ride.
The deal that started it all
In August 2021, Afterpay and Square struck up a marriage proposal that would see both companies join forces under a scheme of arrangement.
The final domino fell just a few weeks ago, when the Bank of Spain approved a Block/Afterpay merger and set the final moves in motion.
Fast forward to today, and we’re seeing both parties cross the T’s and dot the I’s before their scheme of arrangement is finalised on February 1.
Goodbye Afterpay …
It’s been a wild ride for one of the most prominent fintech darlings of the 21st century.
Afterpay co-founders and co-CEOS Nick Molnar and Anthony Eisien took their payments platform from tech minnow to unicorn in five years. Now, they’ll continue to evolve its offering under the Block banner.
With the Block merger finalised, Afterpay shareholders are set to receive 0.375 Block shares for every APT security they hold.
Molnar and Eisen, who hold roughly 19.9 million APT shares each, will trade them in for 7.46 million SQ1 shares apiece and join the Block team.
From here, they’re set to lead Afterpay’s merchant and consumer businesses as part of payment giant Square’s seller and Cash App ecosystems.
Afterpay shares IPO’d at $1.00 a pop in 2016, but securities went for as much as $160.05 early last year as shoppers took their business online.
The BNPL stalwart ended its final day of trade far from that high, however, as shares dropped 2.18% to $66.47 per share.
… And hello Block
While one listing’s out, another one’s in — and Block brings more than BNPL to the ASX’s table.
Block’s secondary shares, known as CHESS depository interests, began trading on a deferred settlement basis today under the ticker ‘SQ2’.
And Block’s potential impact on the local bouse isn’t being taken lightly.
The Australian Financial Review reported the ASX’s group executive for listings, Max Cunningham, said this could be “the most important listing on the ASX since BHP in 1885”.
That’s because there’s a push for both domestic and foreign tech listings on the Aussie exchange — and local unicorns like Canva are ideal candidates.
But back to Block, which is also intent on making waves in the crypto industry.
The tech giant announced earlier this month it was building a Bitcoin mining system — no doubt part of chief executive Jack Dorsey’s vision that cryptocurrency will become central to the way we move money in the years to come.
This isn’t the first time Block has gone in on crypto.
The ASX newcomer is working on everything from a physical Bitcoin wallet to letting users trade the major cryptocurrency through its Cash App.
With Block’s focus on the digital currency only poised to grow, it seems the local bourse’s latest tech play will bring a new focus on crypto to the exchange.