Gadgets
Jack Dorsey’s Square Acquires Australian Credit Giant AfterPay for $29 Billion
The takeover underscores the popularity of a business model that has upended consumer credit by charging merchants a fee to offer small point-of-sale loans which their shoppers repay in interest-free instalments, bypassing credit checks.
It also locks in a remarkable share-price run for Afterpay, whose stock traded below AUD 10 (roughly Rs. 550) in early 2020 and has since soared as the COVID-19 pandemic – and stimulus payments to a workforce stuck at home – saw a rapid shift to shopping online.
The all-stock buyout would value the shares at AUD 126.21 (roughly Rs. 6,890), the companies said in a joint statement on Monday.
That means a payday of AUD 2.46 billion (roughly Rs. 13,430 crores) each for Afterpay’s founders, Anthony Eisen and Nick Molnar. China’s Tencent, which paid AUD 300 million (roughly Rs. 1,640 crores) for 5 percent of Afterpay in 2020, would walk away with AUD 1.7 billion (roughly Rs. 9,310 crores).
“We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” said Dorsey in the statement.
“Together we can better connect our … ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
The Afterpay founders said the deal marked “an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world”.
Stock surge
Afterpay shares jumped slightly higher than Square’s indicative purchase price in early trading before settling just below it at AUD 119.36 (roughly Rs. 6,540) by late morning, up 23.5 percent and helping push the broader market up 1.2 percent.
The deal, which eclipses the previous record for a completed Australian buyout – the $16 billion (roughly Rs. 1,19,020 crores) sale of Westfield’s global shopping mall empire to Unibail-Rodamco in 2018 – also pushed up shares of rival BNPL players.
Afterpay competes with unlisted Sweden-based Klarna, Australia-listed Zip Co, and new offerings from US veteran online payments provider PayPal.
“Few other suitors are as well-suited as Square,” said Wilsons Advisory and Stockbroking analysts in a research note.
“With Klarna rumoured to be building a strategic stake in Z1P, and PayPal already achieving early success in their native BNPL, other than major US tech-titans lobbying an 11-th hour bid, we expect a competing proposal from a new party to be low-risk.”
Credit Suisse analysts said the tie-up seemed to be an “obvious fit” with “strategic merit” based on cross-selling payment products, and that a competing bid seemed unlikely.
The Australian Competition and Consumer Commission, which would need to approve the transaction, said it had only just been notified of the plan and “we will consider it carefully once we see the details”.
Popularity
Created in 2014, Afterpay has been the bellwether of the niche no-credit-checks online payments sector that burst into the mainstream last year as more people, especially youngsters, chose to pay in instalments for everyday items during the pandemic.
BNPL firms lend shoppers instant funds, typically up to a few thousand dollars, which can be paid off interest-free.
As they generally make money from merchant commission and late fees – and not interest payments – they sidestep the legal definition of credit and therefore credit laws.
That means BNPL providers are not required to run background checks on new accounts, unlike credit card companies, and normally request just an applicant’s name, address and birth date. Critics say that makes the system an easier fraud target.
The loose regulation, burgeoning popularity and quick uptake among users has led to rapid growth in the sector, and has reportedly even driven Apple to launch a service.
For Afterpay, the deal with Square delivers a large customer base in its main target market, the United States, where its fiscal 2021 sales nearly tripled to AUD 11.1 billion (roughly Rs. 60,58 crores) in constant currency terms.
The deal “looks close to a done deal, in the absence of a superior proposal,” said Ord Minnett analyst Phillip Chippindale, adding that it “brings significant scale advantages, including to Square’s Seller and Cash app products.”
Talks between the two companies began more than a year ago and Square was confident there was no rival offer, said a person with direct knowledge of the deal.
Afterpay shareholders will get 0.375 of Square class A stock for every Afterpay share they own, implying a price of about AUD 126.21 (roughly Rs. 6,890) per share based on Square’s Friday close, the companies said.
Square said it will undertake a secondary listing on the Australian Securities Exchange to allow Afterpay shareholders to trade in shares via CHESS depositary interests (CDIs).
“At Xbox, we believe that with better tools, creators can make even more extraordinary games,” Haiyan Zhang, GM, Xbox Gaming AI, said in a blog post. “This partnership will bring together: Inworld’s expertise in working with generative AI models for character development, Microsoft’s cutting-edge cloud-based AI solutions including Azure OpenAI Service, Microsoft Research’s technical insights into the future of play, and Team Xbox’s strengths in revolutionizing accessible and responsible creator tools for all developers.”
The aforementioned AI design copilot is a toolset that will help game designers turn prompts into scripts and dialogue trees. In contrast, the character runtime will enable dynamically generated plot beats and quests. We’ve already seen heavy AI integration in games by way of procedural generation — a more recent example being the 1000+ planets in Starfield. Not to mention, enemy AI has been around for way longer.
Inworld made headlines in August when it launched a modded story mode for Grand Theft Auto V, Sentient Streets, in which players had to investigate the rise of a bizarre AI-worshipping cult — a segment loaded with characters that spoke in AI-generated dialogue, on the fly. The mod was later taken down by publisher Take-Two, leaving a permanent strike on the creator Bloc’s YouTube channel. As per The Verge, Inworld’s AI technology can also be used for narration in top-down RPGs to warn players about any events awaiting off-screen and respond to questions like we’ve seen in the past year with AI chatbots like ChatGPT and Bing Chat. Microsoft has also been heavily banking on artificial intelligence, having made a $10 billion (about Rs. 83,254 crore) investment in OpenAI. The company has also integrated AI tools into its popular suite of services and also added an AI copilot to Windows.
Despite being a Microsoft-affiliated AI toolset, it would be interesting to see whether titles using them will be allowed to thrive on other platforms. In July, Valve claimed that it would be cracking down on games that included AI-generated assets if the developer didn’t own the copyright to the piece of art. For the uninitiated, when you insert a prompt to create something in AI, the software simply repurposes existing assets found online and mushes them together — basically stealing from other artists and writers without appropriate commercial licenses. Infringing them would lead to the game not being distributed on Steam, forcing the developers to seek proper licenses for the asset by reaching out to the AI companies involved. It’s unclear how Microsoft’s partnership will play out — as long as AI content is being used as a catalyst to innovate and create something new, it should be fine.
In a post on X shared by BSNL’s Andhra Pradesh (@bsnl_ap_circle) unit, the company confirmed that BSNL users can upgrade their older 2G or 3G SIMs to a 4G SIM for free. Not only will the upgrade be free, but a promotional image shared with the post suggests that users who opt for the upgrade will also receive 4GB of free data that will be valid for three months. It is speculated that BSNL is aiming to boost its upcoming 4G services with this offer. The announcement was first spotted by Telecom Talk.
To access the free data offer and the free upgrade, BSNL users are requested to get in touch with executives at BSNL’s Customer Service Centre, franchisee or retailer stores, or contact one of their Direct Selling Agents (DSA). The promo image also adds in a finer print that the offer is available with certain terms and conditions, but hasn’t detailed any, so far.
Reliance’s Jio recently launched the 4G-supported Bharat B1 feature phone in India. The handset is priced at Rs. 1,299 in India. Alongside 4G connectivity, the phone comes with JioCinema and JioSaavn applications pre-installed.
The Jio Bharat B1 is equipped with the JioPay application, which is said to allow users to make UPI payments. Aiming to increase accessibility, the phone supports 23 languages overall, including multiple regional languages.
Realme, via Weibo, announced the arrival of the Realme GT 5 Pro in China. The display of the handset is confirmed to offer 3000 nits peak brightness. It has also been teased to offer heat dissipation with a surface area of around 10,000mm2. It is confirmed to ship with Qualcomm’s new Snapdragon 8 Gen 3 SoC. The post doesn’t specify the exact launch date of the smartphone, however, given the release of the teasers, the launch could be just around the corner.
The Realme GT 5 Pro has been in the news a lot lately. It is expected to feature a 6.78-inch (1,264×2,780 pixels) AMOLED display and is tipped to come in 8GB, 12GB, and 16GB RAM options along with 128GB, 256GB, 512GB, and 1TB inbuilt storage options.
For optics, the Realme GT 5 Pro is said to have a triple rear camera unit comprising two 50-megapixel sensors and an 8-megapixel shooter at the rear. The camera setup might include a Sony LYTIA LYT808 sensor, an OmniVision OV08D10 secondary sensor, and a Sony IMX890 telephoto sensor. For selfies, there could be a 32-megapixel sensor at the front. It is said to carry a 5,400mAh battery with support for 100W wired charging and 50W wireless charging.
The Realme GT 5 Pro is expected to come with upgrades over Realme GT 5. The latter was launched in China in August with a price tag of CNY 2,999 for the base model with 12GB of RAM and 256GB of storage.
-
Solar Energy3 years agoDLR testing the use of molten salt in a solar power plant in Portugal
-
Camera1 year agoDJI Air 3 vs. Mini 4 Pro: which compact drone is best?
-
world news1 year ago
Gulf, France aid Gaza, Russia evacuates citizens
-
Camera1 year agoSony a9 III: what you need to know
-
world news1 year ago
Strong majority of Americans support Israel-Hamas hostage deal
-
Camera4 years agoCharles ‘Chuck’ Geschke, co-founder of Adobe and inventor of the PDF, dies at 81
-
Solar Energy1 year agoGlencore eyes options on battery recycling project
-
Indian Defense3 years ago
Israeli Radar Company Signs MoU To Cooperate With India’s Alpha Design Technologies
