We revisited Block $SQ this week on our podcast, and I was once again blown away by the unit economics at their two core businesses -- Square and the Cash App. For example, at the Cash App, it costs $10 on average to acquire an active customer and within 3 years each of those customers contributes $60 in gross profit. Impressive.

The unfortunate part however, is that none of the dollars generated by these wonderful businesses actually go to the shareholders. Instead it goes to things like buying Afterpay at a clear premium, buying Tidal so Jack can be friends with Jay-Z, and random bitcoin projects because Jack says so (and just overall operating expenses). I know I sound like a hater, but bear with me.

There are probably some people that believe in not only what Jack Dorsey says about how bitcoin can level the playing field for everyone and democratize the financial system and so on, but also probably believe in him as a CEO. I respect that. What I dislike though, is the hypocrisy of it all.

In last year's proxy statement, there was a proposal to gradually remove the disproportionate voting rights on the dual class share structure. If this happened, that would mean that every share would be equal to one vote, aka fairness for all, right? However, the board (led by Dorsey) opposed the deal. Now why would some who is so in favor of leveling the playing vote against something that does just that? Well because he'd lose his voting power. So he's a fan of fairness for all but only when it benefits him.

If the share structure was changed, it would allow activists to step in and help realize what the business is truly worth. If that ever happens, I will be once again eager to be a shareholder, but until it does I have a hard time owning the business given that there is literally no telling what Jack Dorsey will do with the money. Maybe he'll buy another $500 million worth of bitcoin or even more, who knows?

We broke down the whole business here for those that want to listen: https://open.spotify.com/episode/1MXPZhLJE3SxpB1NdhbTfU?si=b3aLEENsRxev8k4J66zzZg