Who is Jack Dorsey and why is he buying Afterpay (ASX:APT)

The billionaire behind Twitter and Square is gearing up to buy Afterpay.
The post Who is Jack Dorsey and why is he buying Afterpay (ASX:APT) appeared first on The Motley Fool Australia. –

One of the US’s quieter billionaires has just placed a bid to acquire Afterpay Ltd (ASX: APT). But who is Jack Dorsey and what might he want with the ASX’s buy now, pay later (BNPL) gem?

Jack Dorsey is the CEO of both Twitter Inc (NYSE: TWTR) and Square Inc (NYSE: SQ).

Today, Square’s $39 billion takeover bid was approved by Afterpay’s board. The US-based fintech plans to provide Afterpay shareholders with 0.375 shares of Square Class A common stock for every Afterpay security they hold.

The offer implies a $126.21 valuation on Afterpay’s shares – a 30.6% premium on Afterpay’s share price as of Friday’s close.

Who is Jack Dorsey?

Jack Dorsey is a Californian tech entrepreneur with a net worth of US$13.9 billion (around $18.9 billion), according to Forbes.

As well as holding the CEO role at both Twitter and Square, Dorsey co-founded the tech monoliths.

After establishing Twitter in 2006, he was the first person to ever tweet. Dorsey then founded Square in 2009, donated $1 billion (around 28% of his net worth) to COVID-19 relief funds in April, and now, he’s likely to be the future owner of Afterpay.

He is also a major Bitcoin enthusiast.

What does Dorsey want with Afterpay?

According to today’s release from Square, combining the companies will let Dorsey’s fintech company offer BNPL services through its business model.

Square offers a point-of-sales (POS) system and Cash App. Dorsey says both will be strengthened by Afterpay’s acquisition.

According to Square, purchasing Afterpay will let “even the smallest of merchants” offer their customers a BNPL service.

It believes Afterpay will see more sellers using Square, aid its expansion into new locations, and improve its income’s growth rate.

Dorsey commented on the takeover:

Square and Afterpay have a shared purpose… Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.

The leader of Square’s Cash App business Brian Grassadonia also commented on the benefits Afterpay could bring Square:

The addition of Afterpay to Cash App will strengthen our growing networks of consumers around the world, while supporting consumers with flexible, responsible payment options.

Finally, Afterpay consumers are set to benefit by getting access to Cash App’s offerings. The app offers money transfers, stock investing, and Bitcoin purchases. Additionally, Afterpay’s cofounders and co-CEOs Anthony Eisen and Nick Molnar said the takeover will benefit the BNPL company. They said:

By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers… It also provides our shareholders with the opportunity to be a part of future growth of an innovative company aligned with our vision.

The post Who is Jack Dorsey and why is he buying Afterpay (ASX:APT) appeared first on The Motley Fool Australia.

Should you invest $1,000 in Afterpay right now?

Before you consider Afterpay, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Afterpay wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

ASX 200 midday update: Afterpay to be acquired by Square, Oil Search to merge with Santos

What is the outlook for the Afterpay (ASX:APT) share price?
The Square (NYSE:SQ) share price has gained 80% over the last year
Here’s why ASX tech shares are up 6% on Monday

All about Square, the US company acquiring Afterpay (ASX: APT) shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Square, and Twitter. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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