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Jack Dorsey Explores Legal Actions Against Hindenburg To Fight Back After It Shorts Payment Firm Block Inc

The co-founder and CEO of payment firm Block Inc., Jack Dorsey, is the next target of the US short seller Hindenburg after Gautam Adani. As a result, It hammered Dorsey’s net worth. According to Bloomberg Billionaires Index, his net worth plunged by $526 million on Thursday. Following an 11% drop, he now stands at $4.4 billion. Meanwhile, Block fell by about 20%. Reportedly, post discarding the short-seller’s allegations by calling them “factually incorrect and misleading,” Block Inc is exploring legal action against Hindenburg. It also added that the report was designed to deceive as well as confuse investors.

Talking about Hindenburg’s accusations, it published a report titled, “Block: How Inflated User Metrics and “Frictionless” Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion,” on Thursday. The report read that the payment firm overstated the number of its user counts. Furthermore, it understated its customer acquisition costs “Block has wildly overstated its genuine user counts and has understated its customer acquisition costs. Former employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual,” the report read.

It also accused the tech billionaire Jack Dorsey of generating money by selling stocks amidst the pandemic and said that when the Block’s stocks spiked as a result of its facilitation of fraud, co-founders Jack Dorsey and James McKelvey collectively sold over $1 billion of stock at the time.

Soon after publishing the report, Hindenburg dropped a Tweet about the same which stirred a buzz all over the Internet. It Tweeted its latest report and accompanied it with a caption that read, “NEW FROM US: Block—How Inflated User Metrics and “Frictionless” Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion”