Hindenburg research strikes again, as Block Stock Drops After Short Seller’s report!
Shares of the payments company formerly known as Square were down about 13% in recent trading Thursday!
That only after a short seller vigorously questioned the company’s user numbers and accused it of predatory tactics.
Tweet on Hindenburg research short seller report on Block
Hindenburg research strikes again, as Block Stock Drops After Short Seller’s report!#HindenbergResearch #jackdorsey pic.twitter.com/BfLjApZZuz
— The_Journalbiz (@the_journalbiz) March 23, 2023
Factset Chart on Block stocks
Hindenburg Research said a two-year investigation into Block found the company “obfuscates” its Cash App service’s true user numbers by reporting misleading metrics “filled with fake and duplicate accounts.”
It also accused the company of taking advantage of the demographics it claims to serve—lower-income people and minorities—with “predatory loans and fees.”
Block said in a statement that Hindenburg’s report was “factually inaccurate and misleading” and “designed to deceive and confuse investors.” It said it was exploring legal action against the short seller.
Block’s shares, on pace for their lowest close since November, ended Wednesday at $72.65 after falling more than 6% in the regular session. The stock was up more than 15% this year through yesterday, though down more than 70% from its all-time high set in June 2021.
Block is best known for its white credit-card readers, which let businesses accept payments with a smartphone or tablet, though its Cash App peer-to-peer payment service has been a key driver of the company’s growth in recent years.
Hindenburg said CEO Jack Dorsey has amassed a $5 billion personal fortune by taking advantage of Cash App’s users while “professing to care deeply” about them.
Nathan Anderson’s Hindenburg has previously targeted companies like Nikola, the electric truck maker whose founder was later convicted of securities fraud, and Indian conglomerate Adani Group.
