Two months after accusing Adani Enterprises of fraud, US-based Hindenburg Research launched a new campaign on Thursday, this time against Jack Dorsey’s mobile payments company Block, saying it had “grossly overstated” its user base.
Block’s shares fell as much as 22 percent in early Wall Street trading after the report, before recovering slightly.
In late January, Hindenburg in New York accused the Adani conglomerate of price manipulation, accounting errors, tax evasion and money laundering.
The allegations, denied by Adan, caused the value of its seven listed companies to drop by tens of billions of dollars.
Founded by former Twitter chief Dorsey in 2009, Block was previously called Square before rebranding in late 2021.
The technology company handles financial transactions, from payments to merchants to payments between individuals.
The block that owns the Cash App mobile app is growing at an unprecedented rate and is set to surpass $100 billion in market value by 2021. It is currently worth $38 billion.
Hindenburg said California-based Block knew many of its accounts were fraudulent or belonged to the same user, but failed to account for it in its financial disclosure.
It accused Block of taking a “Wild West” approach to regulatory compliance that “made it easy for bad actors to massively create accounts for identity fraud and other scams and then quickly withdraw the stolen funds.”
Hindenburg said he spent two years investigating Block and interviewed dozens of former employees and experts, as well as a detailed analysis of regulatory and court filings.
Block did not immediately respond to AFP’s request.
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