Block Inc (NYSE: SQ) shares are tanking in early trading Thursday after short seller Hindenburg Research put out a bearish report on the company.
‘Magic’ Or ‘Fraud’ At Block? On Wednesday, Hindenburg took to Twitter to announce that “another big one” was coming. The short seller wasn’t kidding. After targeting Indian multinational holding company Adani Group in January, the firm now has former Twitter CEO Jack Dorsey in its crosshairs.
“Block Inc., formerly known as Square Inc., is a $44-billion market cap company that claims to have developed a ‘frictionless’ and ‘magical’ financial technology,” Hindenburg wrote in a new report.
Following a two-year investigation into the company, the short seller is alleging that Block is taking advantage of the people it claims to be helping. What Block calls “magic,” it calls “fraud.”
Hindenburg alleges Block has intentionally misled investors by disguising “predatory” loans and fees as revolutionary technology, citing dozens of interviews with former employees, partners and industry experts, as well as extensive review of regulatory records.
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