#118: Square gets Blocked After Over Paying

It turns out it was a bad day indeed, and many of you might not have seen the charts in the letter. I am currently addressing the issue that has persisted for too long and have made some changes. I am late today again, as I spent the day working on it.

S2N Spotlight

One of the most incredible Australian “success” stories was Afterpay, the buy now, pay later company that helped turn #BNPL into a sector on its own and was acquired by Block (formerly Square) in 2022 for USD 29 billion, making its 2 founders billionaires. Blocks current market value is $35 billion, only slightly above what it paid for Afterpay.

I am pretty sure we will be hearing a lot about acquisitions made at ridiculous valuations with no earnings coming home to roost. Jack Dorsey of course, praised Afterpay in his latest quarterly earnings report after announcing 1000 layoffs.

S2N Observations

There is so much to say, but my day was spent with issues on the site. You can take a look at some of the code I have made available here.

I will leave you with one interesting chart. The Reverse Repo Operations have sucked nearly $2 trillion in liquidity out of the Fed’s system as part of its QT (quantitative tightening). The RREPO is sitting on $292 billion heading towards zero where it was before the COVID pandemic. The “Taper Tantrum” refers to the market reaction in 2013 when the Federal Reserve announced plans to reduce the pace of its bond-buying program, known as quantitative easing (QE). The announcement led to a sharp increase in U.S. Treasury yields and a sell-off in global markets, particularly affecting emerging markets.

So far, nothing has broken, but we are still early in the game.

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