JAY-Z Wins Legal Battle In $300 Million Sale Of TIDAL

A judge in Delaware has dismissed a shareholder class action lawsuit filed against Jack Dorsey and other Block, Inc. board members regarding the $300 million purchase of JAY-Z’s streaming service, Tidal. Chancellor Kathaleen McCormick determined that Block’s directors did not act in bad faith when making the purchase, although it “seemed, by all accounts, a terrible business decision.” The City of Coral Springs Police Officers’ Pension Plan brought forward the lawsuit.

Block, formerly known as Square, initially agreed to pay $306 million for an 87.5% stake in Tidal back in 2021. After adjustments, it was brought down to $237.3 million for an 86.2% stake. The lawsuit blamed the board for going forward with the buy while Tidal was losing money, had lost major contracts, and faced a Norwegian criminal investigation into its streaming numbers.

JAY-Z At The Launch Of Tidal

NEW YORK, NY – MARCH 30: Usher, Rihanna, Nicki Minaj, Madonna, Dead Mouse, Kanye West, Jay Z, Jason Aldean, Jack White, Daft Punk, Beyonce and Win Butler attend the Tidal launch event #TIDALforALL at Skylight at Moynihan Station on March 30, 2015 in New York City. (Photo by Kevin Mazur/Getty Images For Roc Nation)

In the Coral Springs Police Officers’ complaint, they noted the troubling state of Tidal at the time. They also mentioned Jack Dorsey being a personal friend of JAY-Z: “Specifically, Dorsey is the founder, President, Chairman, Chief Executive Officer, and controlling stockholder of the financial technology company Square. TIDAL was, at the time, a troubled company: it had failed to accumulate meaningful market share in the streaming business, had cycled through five chief executives in as many years, and was beset by controversy including in connection with an ongoing criminal investigation into allegations that it had fraudulently inflated streaming numbers. It was also owned in substantial part by a close personal friend of Dorsey’s, the recording artist turned mogul Shawn ‘Jay-Z’ Carter.”

Following Block’s purchase of Tidal, JAY-Z joined the company’s board and remains a director. The Brooklyn rapper originally purchased Tidal alongside other recording artists back in 2015. The company name was previously Aspiro.

[Via]