It’s not what the shareholders wanted to hear, but a Delaware judge has ruled that the acquisition of music streamer Tidal was completely legal, despite being a “terrible business decision.” Block purchased Tidal from rapper and businessman Jay-Z for $306 million in March 2021.
A shareholder class action suit argued that Block’s co-founder Jack Dorsey and the board acted in bad faith by buying the majority stake in the struggling streamer. Tidal was shown to be losing money while having a fraction of subscribers as other digital music platforms like Spotify and Apple Music.
Chancellor Kathaleen McCormick in Delaware Chancery Court stated that the Florida pension fund leading the case failed to demonstrate any misconduct on the part of Block’s directors, but did show low business acumen on their part.
