Hindenburg Research,
March 24, 10:33
Jack Dorsey lost over $500 million in one day
A day earlier, Hindenburg Research said in a report that the fintech Block that Dorsey founded is misleading investors regarding its results.
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(Photo: Joe Raedle/Getty Images)
The founder of Fintech Block (formerly Square) and co-founder of the social network Twitter, Jack Dorsey, following the release of the Hindenburg Research investigation, lost $526 million, or 11% of his fortune, in one day. Now it is estimated at regarding $4.4 billion, calculated Bloomberg.
Dorsey has invested most of his money in Block. The share of a businessman in fintech, according to Bloomberg, is estimated at $ 3 billion. For comparison, Dorsey’s stake in Twitter is worth $ 388 million. Meanwhile, according to the results of trading on Thursday, March 23, Block shares collapsed by 14.8%, to $ 61.57 apiece. During the session itself, the drop in the moment reached 22%.
Fintech stocks began to fall sharply following the publication of an investigation by Hindenburg Research. The latter claims that the payment platform overestimated the number of its users and underestimated the cost of customer acquisition.
Hindenburg Research experts also pointed out that Block’s flagship Cash App is highly popular, among other things, due to servicing customers involved in illegal activities. The report said that former Block employees estimated that between 40% and 75% of the accounts they viewed were fake, involved in fraud, or additional accounts associated with one person.
“Block has ignored internal and external warnings that multiple individuals using the same bank account number to receive public funds is a clear red flag that indicates fraud,” claims Hindenburg Research. She estimates that billions of dollars have been illegally obtained through the app as a result.
Hindenburg Research, which specializes in finding violations in public companies in order to capitalize on the collapse of their shares, announced the opening of short positions once morest Block. Earlier this year, Hindenburg Research released a report exposing the conglomerate of Indian businessman Gautam Adani. As a result, the value of his companies has fallen by more than $100 billion.
Earned $ 147 billion and lost the title of the main rich man in Asia: the story of Adani
Block issued a refutation of the accusations once morest them. “We have reviewed the full report in the context of our own data and believe that it is designed to deceive and confuse investors,” it follows from messages fintech. The company said that they regularly disclose reports and are confident in their products. Block is considering filing a lawsuit once morest Hindenburg Research.
Meanwhile, Kathy Wood, who often buys tech stocks during their big drawdowns, has shown interest in Block as well. Three Wood funds bought more than 338,000 fintech shares. Taking into account the close of trading on March 23, the cost of the purchased package amounted to regarding $21 million, notes Bloomberg.
Marina Anufrieva.
