Biz Break: The ‘Magic’ is gone from Square

Top Of The Order: 

The Magic Is Gone From Square:  Well, depending on your viewpoint, the magic has been gone from Jack Dorsey’s Square for a while now. If you’re an investor in Square — which went public last November at $9 a share, and closed Friday at $9.39, you might think the magic disappeared after the stock hit an all-time high of $15.91 on March 31, or when the shares closed at $13.05 on May 5, just before Square reported its most recent quarterly results.

[graphiq id=”9PcHWcAtsod” title=”Square-A (SQ) Stock Price” width=”600″ height=”628″ url=”” link=”” link_text=”Visualization by Graphiq” ]

No, we come here to bid farewell to Magic. Basketball great Earvin “Magic” Johnson. You may not have known this, but Magic was on the board of directors at Square. At least he was until Friday.

Johnson wrote a letter to Square Chief Executive Jack Dorsey saying he was stepping down from the Square board so that he could concentrate on a new infrastructure fund he has recently launched called JLC Loop Capital Partners. Johnson said the fund managed to raise more than $1.3 billion during the first quarter of the year.

Why would Johnson do such a thing as leave Square behind? Well, money from the feds is a good reason. President Obama has promised a raft of new spending on federal government infrastructure, and JLC has been set up to take advantage of that largesse.

In exchange for Johnson, Square added Paul Deighton to its board. Deighton helped organize the London Olympics in 2012 and is the chairman of London’s Heathrow airport.

So, Magic is gone from Square, but his departure won’t have the same effect on the company as when he retired after winning five NBA titles with the Los Angeles Lakers. Magic ran the Showtime offense there. At Square, Dorsey needs to find out the best way to run his own show.

Middle Innings: 

Less (Job) Security At Symantec: Normally, job cuts and so-so earnings results are enough to send investors fleeing from a company’s stock faster than Mark Zuckerberg can go into damage control over a controversy involving Facebook.

But on Friday, Symantec’s shares ended down by just 11 cents, at $16.79. Not quite the reaction you would expect after a company says it’s going to cut 10 percent of its workforce. Late Thursday, Symantec said it would shave that much off its employee base as it reorganizes its business to recapture ground in the cybersecurity market.

Most likely, Symantec’s stock was unfazed because the company reported fiscal fourth-quarter earnings of 22 cents a share on $873 million in revenue, which was right in line with what it forecast in April. Symantec also said that it expects to report a first-quarter profit between 24 cents and 26 cents a share, and sales in a range of $865 million to $895 million, while analysts had forecast Symantec to earn 24 cents a share on revenue of $876.2 million.

ICYMI: It’s hard to go a week without something about Apple, so if you somehow missed it, Tim Cook & Co. cut a $1 billion check to invest in Chinese ride-hailing company Didi Chuxing. The move was seen as a slap in the face of Uber, which is only based up the road from Apple in San Francisco.  However, Uber CEO Travis seemed to have a pretty good sense of humor about the whole thing…



Bottom Of The Lineup: 

Here’s a look at how some leading Silicon Valley stocks did Friday…

Movin’ On Up: It was a good day for Nvidia, as the graphics chipmaker’s shares rose more than 15 percent after reporting upbeat quarterly results late Thursday. Gains also came from Rovi, NeoPhotonics, SolarCity and Yelp.

In The Red: Decliners included Lending Club, which fell 6.7 percent and was down more than 50 percent for a week which began with the company’s CEO quitting on Monday following a loan scandal at the online loan marketplace. InvenSense, Harmonic, Infoblox and Polycom also ended the day in the red.

The SV150 Index of Silicon Valley’s biggest companies gave up less than 1 point to close at 1,559.

The tech-focused Nasdaq Composite Index shed almost 20 points to close at 4,717.

The blue chip Dow Jones Industrial Average gave up 185 points to close at 17,535.

And the broad-based Standard & Poor’s 500 Index ended the day down by 17 points at 2,046.

Quote Of The Day: “I was a little drunk. Not drunk in any positive sense but just enough to be careless.” — Ernest Hemingway, “The Sun Also Rises.” Friday was World Cocktail Day, and few knew their cocktails like Hemingway.

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Photo: Former Los Angeles Lakers great Earvin “Magic” Johnson. On Friday, Johnson stepped down from the board of directors at Square.  (Chris Pizzello/Invision/Associated Press)


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  • Walking Fool

    Square was all hype. Just another flash in the pants.

    The era of easy VC money has come to an end. The slowdown is already happening.