The fortune of Jack Dorsey, co-founder of Twitter, has plummeted this Thursday after the financial company specialized in short operations Hindenburg published a report accusing Block, his payment company, of fraud and of facilitating money laundering and illegal activities. Hindenburg says the group’s shares are inflated between 65% and 75%.
The company’s share price fell 15% this Thursday amid investor fears and has been reflected in Dorsey’s wealth, which has been reduced by 761 million dollars, about 700 million euros, to about 3,800 million euros, according to data from Forbes.
Block is mainly dedicated to payment management, with payment terminals in stores, financing and leisure services, owning the music platform Tidal.
In his document, Hindenburg indicates that he has investigated Block for two years and concludes that it “facilitates fraud against consumers and the government, avoids regulations, disguises commissions and predatory lending (through ‘buy now, pay later’) as technology.” revolutionary and misleads investors with inflated metrics. He also says that he has inflated his user metrics.
Behind the falls is the same company that recently sank the stock market value of the Indian giant Adani, which it accused of market manipulation and fraud. It had previously caused the shares of US electric car maker Nikola to plummet in 2020. In that case, it ended up in a judicial investigation that convicted its founder, Trevor Milton, of fraud.
Hindenburg, who says he drew on “dozens of interviews” with former employees, partners and experts, review of litigation and regulatory records, as well as public information requests, likens Block’s controls to the “Wild West” and says that it is especially useful for “criminals”. He especially attacks his popular mobile payment application, Cash App, which he accuses of having a large number of false accounts and of being one of the most used for payments for sex trafficking and other illegal activities, without Block taking measures.
The report also attacks Dorsey himself, an eccentric businessman known for his bohemian lifestyle, accusing him of building a fortune “professing to care deeply about the population he takes advantage of.”
Block has responded to the accusations by stating that they are false and ensuring that he is considering taking legal action.
