(Dmytro “Henry” Aleksandrov, Headline USA) Jack Dorsey, an ex-Twitter CEO and censor, recently lost $562 million after a notorious short-seller released a report revealing that his payments company Block misled its investors and embraced a criminal user base.
On Thursday, Hindenburg Research released its findings from a two-year investigation, saying that the company “misled investors on key metrics, and embraced predatory offerings and compliance worst-practices to fuel growth,” according to the Daily Mail.
That same day, Block’s shares plunged nearly 15% and Dorsey lost $562 million, which automatically dropped his net worth 11% to $ 4.4 billion.
Bloomberg Billionaires Index reported that shares of Block plunged nearly 15% on the day, and Dorsey’s net worth took a $562 million hit, dropping 11% to $4.4 billion.
Even though Hindenburg is not an unbiased watchdog, it previously led to criminal charges and convictions, like in the case of Nikola founder Trevor Milton, who was found guilty last year of deceiving investors with exaggerated claims about his electric truck company.
The latest report by Hindenburg includes expansive allegations against Dorsey’s company, formerly known as Square, which also owns the popular smartphone payment application Cash App, the most important part of the report that, according to Hindenburg, is used by criminals for drug deals, sex trafficking and even murder-for-hire.
In its statement, Block said the company would file a lawsuit against Hindenburg for its “factually inaccurate and misleading report’ that was ‘designed to deceive and confuse investors.”
“Hindenburg is known for these types of attacks, which are designed solely to allow short sellers to profit from a declined stock price. We will not be distracted by typical short-seller tactics,” Block 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.”