Hindenburg Takes Short Positions in Dorsey's Block Inc, Resulting in a Sharp Fall in Shares

• Hindenburg's report, backed by testimonies from former Block employees, suggests that 40% to 75% of the accounts they reviewed were either fake, involved in fraudulent activities, or were multiple accounts linked to a single person.
• Following the release of this report, Block's shares plummeted by 20%, dropping to $58.39.
• Jack Dorsey, one of the co-founders of Block in 2009, aimed at revolutionising the credit card industry. He is the largest shareholder of the company, owning approximately 8% of its stake.
• This report emerges amid prevailing concerns about the future of the payments industry, given the persistent high inflation rates and looming fears of an economic downturn, which could potentially affect consumer spending.
• Based on data from Ortex, a financial analytics firm, short sellers have made over $400 million in paper profit, with the short interest standing at 27.96 million shares, or 5.21% of free float.

Hindenburg Research has previously levelled allegations against India's Adani Group, accusing them of stock manipulation and a decades-long accounting fraud scheme. Learn more about the Adani Hindenburg issue in the linked article.

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