 "'Frictionless fraud': Hindenburg shorts Twitter co-founder Jack Dorsey's payments firm Block")
Hindenburg Research on Thursday said it held short positions in Block Inc, alleging that the Jack Dorsey-led payments firm overstated its user counts and understated its customer acquisition costs, a Reuters report said. Dorsey is Twitter’s co-founder. “Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping,” the short seller said in a note published on its website, the report added.
The US short-seller said that former Block employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual, Reuters reported. Meanwhile, shares of Block fell 18% in premarket trading after the Hindenburg report. What is Block? The firm was founded by Jack Dorsey and Jim McKelvey in 2009. According to Bloomberg, it develops a payments platform aimed at small and medium businesses that allow them to accept credit card payments and use tablet computers as payment registers for a point-of-sale system. With inputs from agencies Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .