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Bolling3r

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24/03/23

09:38

Post #: 66936449
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Originally posted by Tekvest: ↑

Equity Markets
Fintech
BTimothy Moorelock shares drop after Hindenburg targets the fintechMar 24, 2023 – 3.15am
Shares in Block fell in New York trading after Hindenburg Research released a report that alleged the fintech company is a fraud. Hindenburg said it has placed a bet against the stock.
In a statement, Block said it intends to work with the US Securities and Exchange Commission and explore legal action against Hindenburg Research “for the factually inaccurate and misleading report they shared about our Cash App business”.
In a lengthly online post on its website, Hindenburg said its conclusion about Block came after a two-year investigation which involved dozens of interviews with former employees, partners, and industry experts.
Block co-founder Jack Dorsey. Bloomberg
Hindenburg said its research also involved an extensive review of regulatory and litigation records, as well as US Freedom of Information Act and public records requests.
“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,” the short seller’s post said.
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Hindenburg alleged that Block’s Cash App was used extensively to defraud US government stimulus programs during the pandemic.
Block, previously known as Square, isa digital payments’ companythat offers cash register services at businesses like cafes and farmers-market booths. But it also offers mobile transactions through Cash App.
Shares in Block were 14.9 per cent lower to $US61.78 at 2.10pm in New York, off its early session lows. The stock has shed more than half of its value from March 2022, with most of the drop having taken place by mid-June 2022.
In its statement, Block also said: “We have reviewed the full report in the context of our own data and believe it’s designed to deceive and confuse investors.
“We are a highly regulated public company with regular disclosures, and are confident in our products, reporting, compliance programs, and controls. We will not be distracted by typical short seller tactics.”
Hindenburg has targeted about 30 companies since 2020 and their shares lost about 15 per cent on average the next day, according to calculations by Bloomberg News. Six months later, the shares were down 26 per cent on average.

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Hindenburg said its research “indicates” that Block has wildly overstated its genuine user counts and has understated its customer acquisition costs.
“In sum, we think Block has misled investors on key metrics, and embraced predatory offerings and compliance worst-practices in order to fuel growth and profit from facilitation of fraud against consumers and the government.
“We also believe Jack Dorsey has built an empire—and amassed a $US5 billion personal fortune—professing to care deeply about the demographics he is taking advantage of.
“With Dorsey and top executives already having sold over $US1 billion in equity on Block’s meteoric pandemic run higher, they have ensured they will be fine, regardless of the outcome for everyone else.”

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ZIP Price at posting: 49.5¢ Sentiment: None Disclosure: Not Held
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(20min delay)
Last $1.34		Change 0.030(2.29%)		Mkt cap ! $1.504B

Open	High	Low	Value	Volume
$1.33	$1.39	$1.33	$16.27M	11.99M

Buyers (Bids)

No.	Vol.	Price($)
13	215573	$1.34

Sellers (Offers)

Price($)	Vol.	No.
$1.35	10912	2

View Market Depth

No.	Vol.	Price($)
13	215573	1.340
5	410965	1.335
10	326293	1.330
3	144068	1.325
8	110466	1.320

Price($)	Vol.	No.
1.350	10912	2
1.355	307202	3
1.360	670736	20
1.365	211800	2
1.370	66057	6

Last trade - 16.10pm 07/05/2024 (20 minute delay)


Last $1.35		Change 0.030 ( 3.48 %)
Open	High	Low	Volume
$1.34	$1.39	$1.34	2373904
Last updated 15.59pm 07/05/2024 ?

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