On Thursday morning, shares of Jack Dorsey’s Block (SQ) dropped by 20% after a prominent short-seller named Hindenburg Research announced their findings of suspicious fraudulent activities in the company’s operations. They also publicly revealed their short position against the payments firm which runs the famous Cash app.
Hindenburg Attacks Jack Dorsey’s Block
Hindenburg Research, a notorious yet reputable short seller, has set its eyes on Twitter founder Jack Dorsey and his firm Block (SQ). Dorsey, who is said to have a net worth of close to $5 billion, acts as the chief operating officer and spearheads Block’s noteworthy products including Square, Cash App, Tidal and Spiral.
Read More: Hindenburg Research Exposes Jack Dorsey’s Block Inc
Following the release of the report, the share price of Block fell by 20%, reaching $57.85 in premarket trading. The firm may experience its biggest percentage decline since March 2020 if losses continue throughout today’s trading session. Market experts anticipate a further decline of 40-50% over the coming days if Block fails to any viable positive statements surrounding the accusations.
Hindenburg Alleges Multiple Frauds
This comes after the recent attack on one of Asia’s richest man, Goutam Adani and his Adani enterprise. Hindenburg added that Block “obfuscates” the number of people who are using the Cash App platform by reporting deceptive “transacting active” metrics that are stuffed with phony and duplicate accounts.
Our 2-year investigation concludes $SQ systematically exploits the demographics it claims to help. The magic behind $SQ has not been innovation, but its willingness to mislead investors, facilitate fraud, avoid regulation & dress up predatory products as revolutionary tech. (3/n)
— Hindenburg Research (@HindenburgRes) March 23, 2023
According to the report, the short seller put the theory to the test by creating accounts in the names of former President Donald Trump and Tesla CEO Elon Musk. The short seller also created an account for a Cash App card — referred to as the Cash Card — under the blatantly fake Donald Trump account which subsequently got approved.
Moreover, the report suggests that during the pandemic, co-founders Jack Dorsey and James McKelvey sold a combined total of almost $1 billion worth of shares of the company as the share price skyrocketed.
Also Read: Coinbase CEO Brian Armstrong, CLO Grewal Sold COIN Stocks Ahead Of US SEC Action
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.