👎 Block Inc.'s shares are plummeting… Who's to blame, and how can they recover⁉️

👎 Block Inc.'s shares are plummeting… Who's to blame, and how can they recover⁉️
Not all companies perform as impressively as Tether. In the case of Block Inc., third-quarter revenue dropped significantly, even though its CashApp remains among the top five most downloaded apps in the United States🇺🇸.

▶️ A bit of context: Until 2021, Block Inc. was known as Square, but the name change reflects its focus on blockchain. Its current business model combines two pillars: the seller ecosystem and the consumer ecosystem, with the vision of building an integrated, open-source system, efficiently uniting hardware and software.
What went wrong❓
▶️ Reputation issues: The innovative CashApp, a key piece of the consumer ecosystem, is under investigation by the Consumer Financial Protection Bureau due to numerous user complaints.

▶️ Intense Competition: Analysts from Gazprombank highlight Block’s toughest challenges as stemming from major players like Apple (with its Tap to Pay feature) and PayPal, which continue to gain market share.

▶️ Strategic changes: In a letter to shareholders, Block Inc. announced plans to redirect resources toward projects related to bitcoin mining and the development of Bitkey, its proprietary cryptocurrency wallet.

▶️ Controversial cuts: To fund these new initiatives, the company proposes reducing investments in existing projects such as TBD (its decentralized finance unit) and Tidal (a music streaming platform), which have been profitable so far.

▶️ Financial impact: Block’s shares dropped 15%, despite net revenue growing by 6% ($5.98 billion). However, this fell short of analysts’ expectations, who estimated revenue of $6.24 billion, according to Bloomberg.

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