Jack Dorsey’s fortune plummets by $562 million, short seller accuses block fraud

A notorious short-seller took aim Jack Dorsey.

Hindenburg Research revealed a short position in Block on Thursday, announcing the results of a two-year study that found the company “misleading investors on key metrics and using predatory products and compliance tactics to drive growth.” We accepted the worst practices.”

Block’s stock plunged nearly 15% on the day, taking a $562 million hit to Dorsey’s net worth, down 11% to $4.4 billion. Bloomberg Billionaire Index.

Block countered in a statement to DailyMail.com, saying it would consider legal action against short sellers for “substantially inaccurate and misleading reports” that were “designed to deceive and confuse investors.” .

“Hindenburg is known for this type of attack and is designed solely for short sellers to profit from falling stock prices,” the company added. “Don’t be fooled by typical short-selling tactics.”

Block founder Jack Dorsey (above) is in the sights of Hindenburg Research.  Hindenburg Research has released a report accusing his company of misleading investors and hosting a criminal user base.

Block founder Jack Dorsey (above) is in the sights of Hindenburg Research. Hindenburg Research has released a report accusing his company of misleading investors and hosting a criminal user base.

Brock’s stock price plunged nearly 15% that day, taking a $562 million hit to Dorsey’s net worth, down 11% to $4.4 billion.

Hindenburg is far from an impartial watchdog, profiting from taking a large position in the company that publishes the report and betting that stocks will plummet as the market digests the research’s allegations.

However, Hindenberg’s research has previously Nikola founder Trevor Milton convicted Last year he misled investors with exaggerated claims about his electric truck company.

of Latest Hindenburg Report Block, formerly known as Square, is a payments company that also owns the popular smartphone payment application Cash App.

Many of Hindenburg’s allegations center around alleged rampant criminal use of Cash App for drug trafficking, sex trafficking, and even murder.

The report cites rapper 22Gz, who boasted in the lyrics of his 2020 song “Cash App.” Hindenberg said Bullock sponsored the giveaway to promote the song’s music video.

Last June, 22Gz, whose real name is Jeffrey Mark Alexander, was arrested in New York City on suspicion of attempted murder. That lawsuit is pending.

Hindenburg said many rappers openly boast in their songs about using Cash App for criminal purposes, and that the payment app is being used for criminal schemes such as government benefit fraud. I gave real-world evidence that there is.

just in case Rapper Nuke Bizzle found guilty of committing a COVID stimulus scam, using Cash App as a payment mechanism. He was arrested just weeks after boasting of this plan in lyrics.

“Blocs have traditionally hosted very ‘underfunded’ people – criminals,” Hindenberg said in the report.

Founded by Nathan Anderson (above), Hindenburg has profited by taking large positions in companies that publish reports, betting their stocks will plummet.

Rapper 22Gz boasts in the lyrics of his 2020 song Cash App:he was later charged with attempted murder

Fontrell Antonio Baines, a 33-year-old rapper known as “Nuke Bizzle,” has been sentenced to six years in prison after admitting to stealing $1.2 million in COVID relief funds. He had boasted in a music video weeks before his arrest of a scheme prosecutors said had relied on Cash App.

Brock’s full response to the Hindenburg Report

“We are working with the SEC to consider legal action against the factually inaccurate and misleading report Hindenburg Research shared today about our Cash App business.

“Hindenburg is known for this type of attack and is designed solely for short sellers to profit from stock price declines. We have reviewed the full report in the context of our own data. believes it is designed to deceive and confuse investors.

“We are a highly regulated, publicly traded company that makes regular disclosures and have confidence in our products, reporting, compliance programs and controls. .

“The company’s ‘Wild West’ approach to compliance has made it easier for bad actors to mass-create identity fraud and other fraudulent accounts and quickly withdraw stolen funds,” the research firm said. Added.

Analysts at Hindenburg claimed they could easily create accounts impersonating celebrities such as Elon Musk and Donald Trump, and even order cash cards in Trump’s name.

Fraudsters can take advantage of this weak identity control by creating fake accounts to solicit donations or impersonating legitimate businesses, Hindenburg said.

“The ‘magic’ behind Brock’s business is not about disruptive innovation, but about promoting fraud against consumers and governments, evading regulation, masquerading predatory loans and fees as revolutionary technology, and exaggerating. It is the company’s willingness to mislead investors with published metrics.”

Hindenburg also said Block “obfuscates” the number of individuals on the Cash App platform by reporting “active indicators of misleading transactions filled with fake and duplicate accounts.” ” said he does.

Block said in a regulatory disclosure that Cash App will have 51 million monthly transactions at the end of 2022, up 16% from the previous year.

Short sellers have also flagged a number of large insider sales of stocks in recent years, with co-founders Dorsey and James McKelvey collectively selling more than $1 billion in shares during a pandemic that saw the company’s stock skyrocket. I pointed out that it was sold.

Other executives, including finance chief Amrita Ahuja and Cash App’s chief manager Brian Grasadonia, also dumped millions of dollars in shares, the report added.

Hindenburg said analysts could easily create accounts impersonating Elon Musk and Donald Trump and even order cash cards in Trump’s name.

Wall Street analysts say if the allegations about Cash App are proven, they would most likely face regulatory scrutiny and hurt Block’s profitability.

“What I am really concerned about is Cash App, fraud accusations, multiple accounts, account openings and pseudonyms. Told.

“There is some evidence[in the report]that this is happening. So I think that’s the most damaging part of the report,” he added.

Bullock denounced the allegations as false.

“We have reviewed the full report against our own data and believe it is designed to deceive and confuse investors,” the company said in a statement.

“We are a highly regulated, publicly traded company that makes regular disclosures and have confidence in our products, reporting, compliance programs and controls.”

https://www.dailymail.co.uk/news/article-11896899/Jack-Dorseys-fortune-plunges-562M-short-seller-accuses-Block-fraud.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 Jack Dorsey’s fortune plummets by $562 million, short seller accuses block fraud

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