Hindenburg Research is going after Block (CashApp)!
Hi HODLers and Hiveans,
This might be a touchy subject but I want to talk about the latest shortseller report from Hindenburg Research on Block, Jack Dorsey's payment company.
$BLOCK Stock Price
As usual, Hindenburg took a short position prior to publishing the report.
The main point is the following, the report claims that Block allowed criminal to:
Set-up fraudulent accounts, catering to many criminals who used the platform to steal funds.
They claim that interviews with former employees by Hindenburg found out:
that roughly 40% to 75% of reviewed accounts were fake, involved in fraud, or tied to a single individual.
Basically implying that thieves didn't have their profile blocked (just the specific account in case wrongdoing was found). They also imply a lot of government stimulus checks were transferred to Cash App accounts and some were not legitimate
Finally, they claim that Block uses its Tech aura to bypass financial regulation while selling financial products to its customers.
“The ‘magic’ behind Block’s business has not been disruptive innovation, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics,”
Hindenburg Research got famous after publishing a shortseller report about ADANI Group and saying this company was an Enron-like fraud. It went on to show the connection from this company to the Indian Government and criminals around the world.
ADANI Price Share
The stock is down more than 50% following the shortseller report.
Thoughts
I do not know if all the facts they stated are true (mostly they should be or they could be sued).
In any case, and despite the fact that they benefit from Block's share price dropping. I believe shortsellers are NEEDED for the market to clean itself from frauds and Ponzi schemes.
I sometime wished we had a lot of them in the CryptoWorld to flush out some of these shitcoins...
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