Shares of Jack Dorsey’s Block plunged nearly 15% by Thursday’s close after short seller Hindenburg Research announced that the payment company was its latest short position, alleging that Block allowed criminal activity to operate with lax controls and “highly” inflates Cash App’s transacting user base, a key metric of performance.
Hindenburg described Block’s internal systems as a ”‘Wild West’ approach to compliance.”
“Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping,” Hindenburg said in its report. The research firm said Block’s Cash App thrived on serving “unbanked” customers.
Source: CNBC
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