Hindenburg report wipes out $526 mn from Jack Dorsey's worth

San Francisco, Mar 24 (IANS): Former Twitter co-founder and CEO Jack Dorsey was left poorer by $526 million after short-seller Hindenburg Research revealed that his digital payment company Block facilitates fraud against consumers and the government.

After his worst single-day decline, Dorsey is now worth $4.4 billion, according to Bloomberg Billionaires Index.

Block's shares also nosedived as much as 22 per cent on Thursday, before closing down 15 per cent late on Thursday.

Block, formerly known as Square, claims to have developed a "frictionless" and "magical" financial technology with a mission to empower the "unbanked" and the "underbanked".

"Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping," said Hindenburg Research in its report, taking its latest short position on Block.

"We also believe Jack Dorsey has built an empire -- and amassed a $5 billion personal fortune -- professing to care deeply about the demographics he is taking advantage of," it added.

Block or Dorsey were yet to react to the Hindenburg report.

According to the report, Block embraced one traditionally very "underbanked" segment of the population: criminals.

"The company's 'Wild West' approach to compliance made it easy for bad actors to mass-create accounts for identity fraud and other scams, then extract stolen funds quickly," the report mentioned.

In sum, "we think Block has misled investors on key metrics, and embraced predatory offerings and compliance worst-practices in order to fuel growth and profit from facilitation of fraud against consumers and the government," said Hindenburg.



Top Stories

Leave a Comment

Title: Hindenburg report wipes out $526 mn from Jack Dorsey's worth

You have 2000 characters left.


Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Daijiworld.com will not be responsible for any defamatory message posted under this article.

Please note that sending false messages to insult, defame, intimidate, mislead or deceive people or to intentionally cause public disorder is punishable under law. It is obligatory on Daijiworld to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using daijiworld will be purely at your own risk, and in no way will Daijiworld.com be held responsible.