Block bets on lending expansion after stock slump

Core Viewpoint - Block, led by Jack Dorsey, is expanding its lending operations despite a 30% decline in stock value this year and slowing revenue growth [1][5] Lending Expansion - Block has received approval from the Federal Deposit Insurance Corporation to originate loans through its banking subsidiary, Square Financial Services, allowing direct offering of small-dollar consumer loans [2] - This expansion includes the Cash App Borrow product, which provides short-term loans averaging under $100 and lasting about a month [4] - The lending segment has seen transaction losses increase by 39% in the last quarter, raising concerns about the risks associated with small-dollar lending [3] Financial Performance - Block's recent quarterly results showed a revenue growth of only 4.5% year-over-year, which fell short of Wall Street expectations, leading to an 18% drop in stock price, the largest single-day decline since 2020 [5] Product Development - Block has launched Afterpay on the Cash App card, enhancing credit options for customers and positioning Cash App as a banking alternative [6] - The company acquired Afterpay for $29 billion in early 2022, which competes with Affirm [6] AI Investment - Block announced a significant investment in artificial intelligence, planning to utilize Nvidia's AI systems with Blackwell chips for open-source AI research [7] - The specific goals of this AI initiative have not been disclosed, but the company aims to explore innovative solutions for its customers [7]