Short-selling company Hindenburg’s next target Jack Dorsey has suffered the loss of a big chunk of its fortune. Hinderburg released a report revealing how they used “Frictionless” fraud facilitation to manipulate over $1 billion out of the users.
Hindenburg accused the firm Block of using “magic” terms for facilitating a fraud against consumers and the government. Before moving ahead to the details of the scam, let us first know about the company Block owned by Jack Dorsey.
About Jack Dorsey’s Firm: Block
The company “Block” was founded in the year 2009 by Jack Dorsey and his partner Jim McKelvey. The company was named “Square” at first and it’s a payment platform that aims at small and medium businesses. The company allows them to use credit cards and smartphones for transactions.
Block also owns other firms including “Cash App” which allows access to monetary transfers between users and businesses. Hindenburg has also mentioned Cash App in its report and revealed “Cash App, which analysts have said is the most important driver of the stock, has demonstrated signs of stagnation with slowing inflows and account growth.”
Note: Jack Dorsey is an American Internet Enterpreneur and also co-founder and former CEO of Twitter
Source: Twitter
Hinderburg’s Accusations on Jack Dorsey
Hindenburg released a report on Jack Dorsey’s firm Block accusing them of being overhyped and defrauded. Hinderburg’s report made Block suffer a loss of 22% in the company’s shares. Here are a few accusations that are claimed under the report against the company Block:
- Block has misled its investors by faking the number of users on its platform. Source: former employees have revealed that the company has almost 75% fake users in its database.
- The company has failed to block the fraudsters from its platform even after putting them on the blacklist.
- Jack Dorsey allowed the Cash App platform to manipulate illegal transactions and tried to suppress the concern.
- The firm even allowed fake accounts of high-profile individuals like Donald Trump, Elon Musk, and Jack Dorsey himself. This decreases the authority of the platform making it more suspicious.
Source: Hindenburg Research
Also Read: Adani Group Share Price: Pre and Post-Hindenburg Report!! Adani Group Latest News…
- Block allowed defrauded transactions during Covid-19 even after several warnings from other agencies.
- Overhyping ordinary or predatory sources of revenue as technological breakthroughs.
- Jack Dorsey’s firm was recently investigated by the U.S. Securities and Exchange Commission (SEC) for bypassing capped interchange fees and charging elevated merchant fees.
Loss Suffered After the Report
Hindenburg released a report against Jack Dorsey’s firm Block on Thursday. After the reports revealed that Block has inflated user metrics and its stock has a downside of 65% to 75%.
Dorsey suffered a loss of $526 million in just one day after the reports revealed that the company is allegedly manipulating its users. According to Bloomberg Billionaires Index the billionaire’s net worth now stands at $4.4 billion after an 11% loss i.e. loss of more than half a billion.
Hindenburg revealed another report on 24th January 2023 on an Indian business tycoon Gautam Adani who was the second richest person at that time. The billionaire’s fortune soon suffered a backlash and Adani went out of the top 20 richest people in the world. Adani stands at 21st rank in the list of richest person list with a net worth of $61.8 billion. (Source: Bloomberg Billionaires Index)
Also Read: Adani’s 7 Major Firms Down After Hindenburg Report!! See What the Report Reveals…