Hindenburg accuses Jack Dorsey’s company of fraud and deception, Block Inc. plummets. Payment company Block Inc., led by Jack Dorsey, saw a significant decline in its shares after Hindenburg Research claimed that the company has misled investors.
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Hindenburg published its report after a two-year investigation, which alleges that Block has provided false information to investors.
The report was distributed via Twitter and on Hindenburg’s website. The firm, run by Nathan Anderson, was also responsible for triggering a selloff in shares of Gautam Adani’s companies in January 2023.
Hindenburg’s report on Nikola Corp. in September 2020 led to criminal charges against the company’s founder, Trevor Milton, who was later convicted of defrauding investors.
Block, which declined by 20% to $58.35 in premarket trading, did not immediately respond to a request for comment from Bloomberg News.
The financial service company, previously known as Square, was launched in 2009 as a credit card reader for vendors and customers that could be plugged into mobile phones.
Square Cash, later renamed as Cash App, was introduced in 2013 as a competitor to mobile service payment company Venmo, allowing customers to transfer funds.
Square expanded its offerings in 2014 to include short-term loans and introduced Cash Card, a prepaid debit card that can be used outside the virtual wallet, in 2017.
In 2018, Cash App allowed users to trade Bitcoin on the platform, followed by the feature of free stock trading in the following year.
After acquiring Australia’s Afterpay for $30 billion in 2021, Block added a Buy Now, Pay Later option, and was rebranded as Block in December of the same year to reflect its broader cryptocurrency and blockchain aspirations.
In 2022, Dorsey renounced the CEO title and opted for the name ‘Block Head’, but the role still carries the same responsibilities.
Block reportedly fell over 45% in 2022 amid a spike in interest rates.
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