- Block (SQ) shares plummeted after Hindenburg Research declared a wager on the stock's decline, claiming the payments company helmed by Jack Dorsey had enabled fraudsters to gain from government stimulus programs during the pandemic. Block dropped 20% to $58.31, marking its biggest intraday dip in three years.
- The damning Hindenburg report, spanning several pages, accused Block, the company behind the popular Cash App platform, of harboring a vast number of fake and duplicate accounts. After a thorough two-year investigation, the firm gathered evidence from Department of Justice complaints and testimonies from former employees to back their claim. These ex-employees described an internal culture of silencing concerns and disregarding user complaints, even as questionable activities allegedly flourished in the platform.
Why it matters
Since 2020, Hindenburg Research has caused a stir in the market by targeting 30 companies, with their respective shares dropping an average of 15% the day following the report and 26% six months later. The Hindenburg Adani report in January sparked the most significant decline, with Adani Enterprises Ltd. plummeting 48%.