Magic Johnson Leaves Square’s Board

It seems that after a rocky first six months as a publicly traded company, Jack Dorsey may be bracing for more rough seas as he looks to replace board members.

Not even a year after joining the board at Square, Magic Johnson has announced that he is resigning. Despite Johnson’s insistence that he is leaving due to an unforeseen opportunity that has arisen within a new firm he recently started, the timing of the resignation isn’t great news for Square.

As Recode reported late last week, in a letter addressed to Square CEO Jack Dorsey, Johnson wrote of securing an the unexpected large amount of money for his new venture in a remarkably short amount of time.

“Initially, I thought it would take some time to raise capital,” Johnson said in his letter. “However, my team and I were fortunate that the first investor we approached invested $1 billion. Within the first quarter of 2016, we have over $1.3 billion in our newly formed fund, [which] will require a significant and unwavering time commitment from me as I work to secure contracts around the country.”

Square has struggled in the last six months and recently released an underwhelming earnings support that sent its stock into an even deeper slump. As PYMNTS recently reported, in its second quarterly earnings report since going public in November of last year, Square posted a loss of $0.14 per share on $379 million in revenues in April (2016), up 51 percent, compared to the $0.09 per share loss on $344 million in sales expected for the March (2016) period. The loss sent the stock into a selloff, driving the price down to the tune of 21 percent when all was said and done.

Recode reports that Square will replace Johnson with Paul Deighton, former commercial secretary to the treasury of the United Kingdom and the second Brit to be named to the board in recent months. Square does not currently do business in the U.K.