Jack Dorsey, Co-Founder of Block Inc. has lost about $526 million following the latest Hindenburg report which accuses Block of supporting fraud.
Dorsey’s net worth plummeted from Thursday when the Hindenburg report came out.
The report claims that Block had inflated user metrics, and that the stock has downside of 65% to 75%.
It also claimed that the payments company ignored widespread fraud.
Block is payment company co-founded by Jack Dorsey, Former Co-Founder of micro-blogging site, Twitter.
Following the report, Dorsey’s fortune plunged by $526 million on Thursday, his worst single-day decline since May. He’s now worth $4.4 billion after the 11% drop, according to the Bloomberg Billionaires Index.
ALSO READ: Twitter Co-Founder, Jack Dorsey, Launches New Social Media App, Bluesky
The Bloomberg wealth index estimates his stake in the firm is worth $3 billion, while his position in Elon Musk’s social media company is valued at $388 million.
Hindenburg released a report Thursday claiming Block had inflated user metrics, and that the stock has downside of 65% to 75% “on a purely fundamental basis.” The company denied the allegations and said it plans to explore legal action against the short-seller.
Block Shares fall:
Block fell as much as 22% on Thursday, before closing down 15%.
Block $SQ shares down 20% on allegations that CEO Jack Dorsey runs it like Tony Montana — facilitating fraud, drug dealing and murder! pic.twitter.com/dPv74Iks3s
— Chamath Palihapitiya’s burner (parody) (@ChamathWarriors) March 23, 2023
Shares of former Twitter CEO Jack Dorsey’s company Block $SQ are falling like a rock during pre-trading today after Dorsey’s company was accused of fraud. There seems to be a pattern of Woke Leftists committing massive financial fraud. pic.twitter.com/nKRV9C3ESG
— Charles R Downs (@TheCharlesDowns) March 23, 2023
Block shares plunge after Hindenburg says Jack Dorsey’s company facilitates fraud. “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 said. https://t.co/Qrh9wSEdEN pic.twitter.com/D8qkCvA0o2
— Holger Zschaepitz (@Schuldensuehner) March 23, 2023
Jack Dorsey pic.twitter.com/J6s6yu5rXA
— RVCJ Media (@RVCJ_FB) March 24, 2023
The Hindenburg Report:
Report by the prolific short-seller platform claimed that Block, once known as Square, is committing widespread fraud in its performance metrics.
In a report it released on Thursday, Hindenburg said Jack Dorsey’s Block misleads investors by overstating user numbers with “fake and duplicate accounts.”
Also, the report said Block’s lax oversight encourages criminal activities to flourish on its money-sharing applications like Cash App.
Block predatory to Gen Zs, Millennial and Minorities:
The report also alleged that Block is predatory to Gen Zs, Millennials and Minorities.
It said “Block has systematically taken advantage of the demographics (Gen Zs, Millennials and Minorities) it claims to be helping.”
Block Reacts to report:
Meanwhile, Jack Dorsey’s Block has reacted to the allegations, calling it a misleading information.
It condemned the report and vowed to take up legal actions against the publishers of the report.
Describing the allegations, Block in a statement said, Hindenburg report shared “factually inaccurate and misleading” information.
“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.”
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