According to Hindenburg, Block’s user metrics have been inflated, and the stock has a 65%-75% downside. According to a report released Wednesday, Hindenburg said Block Inc. had failed to address rampant fraud on its platform, particularly for merchants selling fake goods and services. The research firm also alleged the company was using accounting tricks to boost revenue figures inflated by more than $100 million in 2018 while obscuring losses of up to $50 million over the same period. In response, Block Inc.’s board has launched an independent investigation into the allegations raised by Hindenburg Research and pledged full cooperation with law enforcement agencies should any criminal activity be found. Block Inc. co-founder Jack Dorsey tweeted Thursday night that he was “collaborating closely” with investigators and would provide updates as they become available.
The news sent shockwaves through the tech community and caused Block’s stock to plummet. The company had been viewed as a rising star in the industry, with investors betting its success would revolutionize businesses. But now, those dreams have been dashed, leaving many investors wondering what went wrong. Block’s CEO and CFO released statements Thursday night saying they were “shocked” by Hindenburg’s report and will defend their reputation against any unfounded allegations.
Since founding Square in 2009, Dorsey has taken on a number of roles at the company. He serves as its CEO and Chairman while holding the same positions as Twitter. Overseeing both companies, he’s been able to manage their respective successes and guide them through times of turbulence. His ability to navigate difficult times has earned him widespread respect from Silicon Valley tech leaders. More recently, Dorsey has become more involved in cryptocurrency initiatives such as Bitcoin development and financial innovation projects. He was an early supporter of Bitcoin Cash (BCH), setting up nodes for the project during its launch in 2017. To further grow his industry involvement, Dorsey set up Square Crypto – a team dedicated to improving cryptocurrency technology and driving adoption worldwide.
Anderson’s reputation as a corporate investigator has only grown since then, drawing attention from the world’s most powerful financial institutions and media outlets. In addition to his investigations into high-profile figures like Adani, Hindenburg has also lodged complaints against major companies like Vale S.A., alleging financial mismanagement and perversion of justice. In Bloomberg’s wealth index, Adani ranks 21st with a $60.1 billion fortune, up 65% to 75% from where he once ranked second in the world.
Anderson is determined to bring accountability to these organizations and hold them accountable for their actions – no matter how large, or influential they may be. Hindenburg has also published reports on Tesla, accusing the electric car maker of exaggerating its production numbers and inflating its stock price. The firm’s research caused Tesla’s share price to drop sharply in October 2020, investors have since regained their confidence in the company, and shares are now up about 34% from where they were at the start of 2021.