On Thursday, Hindenburg charged Block, a firm owned by Twitter founder Jack Dorsey, with “frictionless” fraud that exaggerated user numbers and allowed insiders to profit by almost $1 billion.
The “magic” behind Block’s business has not been disruptive innovation, according to a two-year investigation by a US-based short-seller, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, disguise predatory loans and fees as ground-breaking technology, and deceive investors with inflated metrics.
Following the publication of the article, shares of Block Inc. fell by 20%, and Hindenburg claimed to have placed short positions in those shares.
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