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Third Point Bets Big on Block's Future Monetization
4 Aug
Summary
- Third Point's Offshore Fund returned 7.7% in Q2 2026, outperforming hedge funds.
- Block's Cash App is transitioning to deeper monetization, says Third Point.
- Square Financial Services' 2025 approval allows nationwide Cash App Borrow origination.
Third Point Management's Q2 2026 investor letter shows its Offshore Fund achieved a 7.7% return, surpassing hedge fund benchmarks despite lagging broader equity markets. The fund's performance benefited from strong sectors like semiconductors and aerospace. The firm sees Block, Inc. (NYSE:XYZ) entering a critical phase of deeper monetization for its Cash App, which now boasts nearly 60 million monthly transacting actives.
A key catalyst identified is Square Financial Services' 2025 approval to originate Cash App Borrow nationwide. This development is expected to significantly enhance Block's profitability by allowing direct loan origination through its own banking subsidiary. This move grants greater control over underwriting and economics, positioning Block for substantial growth.
Third Point's credit portfolios also delivered gains, with structured credit remaining resilient. The firm is maintaining a conservative portfolio strategy to navigate market volatility, aiming to capitalize on opportunities while mitigating risks from sudden market shifts.
