Hindenburg bypasses Block, the payment company of Jack Dorsey, co-founder of Twitter
File image of Jack Dorsey. AFP
Hindenburg Research said on Thursday it held short positions in Block Inc, alleging the Jack Dorseya managed payment company overstated its user count and understated its customer acquisition costs, a Reuters says the report.
Dorsey is the co-founder of Twitter.
“Our 2-year investigation concluded that Block has consistently taken advantage of the demographics it claims to help,” the short seller said in a note posted on its website, the report added.
NEW FROM US:
Block—How Inflated User Metrics and ‘Frictionless’ Fraud Facilitation Helped Insiders Cash in Over $1 Billionhttps://t.co/pScGE5QMnX $SQ
(1/n)
— Hindenburg Research (@HindenburgRes) March 23, 2023
The US short seller said former Block employees estimated that 40% to 75% of the accounts they reviewed were fake, involved in fraud or were additional accounts linked to a single person, Reuters reported.
Meanwhile, Block shares fell 18% in premarket trading after the Hindenburg report.
What is the block?
The company was founded by Jack Dorsey and Jim McKelvey in 2009. According to Bloombergit is developing a payment platform for small and medium-sized businesses that allows them to accept credit card payments and use tablets as payment registers for a point-of-sale system.
With contributions from agencies
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