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Block's market value is dropping steadily, cut in half since April. 

Behind the scenes: A lot of fintechs are suffering the same. But what's unique about Block's rout is that it comes as it's not only being slammed by a market storm, but digesting the $27 billion purchase of Afterpay. 

Integrating Afterpay and plugging the buy-now-pay-later into Block's system is critical to the success of both the deal and the combined company. 

The value of the stock deal was $29 billion at announcement in August, and closed at a value of $27 billion early this year.

Of note: Block's (formerly Square) market value when it inked the Afterpay deal was around $120 billion. It's now just above $30 billion, or darn close to the value of the entire Afterpay purchase. 

Investors are keenly aware of that fact, and so, apparently, is activist hedge fund titan Dan Loeb. Research firm Gordon Haskett pointed out in a note that Loeb, in a tweet reply, made mention of that stark value drop by Block.

A person familiar with the matter pointed out that Block's ability to parse through Afterpay's loans and move from one balance sheet to another is a much more arduous process than anticipated. 

Rising interest rates are also playing a role in the indigestion, the person said. 

The bottom line: If Block isn't able to pull off this integration faster, and build its market value back up, it, too, may be the target of a well-capitalized suitor. At the very least, it may have to contend with the kind of activist investor ire that Third Point's Loeb is already hinting at.  

That said, an entity seeking to shake things up at Block needs to get past Jack Dorsey's majority ownership of the company. 

Block hit by market turmoil and Afterpay indigestion

Jack Dorsey's fintech faces wave of challenges

Photo Illustration: Sarah Grillo/Axios. Photo of Block CEO Jack Dorsey: Burhaan Kinu/Hindustan Times via Getty Images

Fintech

Block&#x27;s market value is dropping steadily, cut in half since April. Behind the scenes: A lot of fintechs are suffering the same. But what&#x27;s unique about Block&#x27;s rout is that it comes as it&#x27;s not only being slammed by a market storm, but digesting the $27 billion purchase of Afterpay.

Block hit by market turmoil and Afterpay indigestion

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