Block Shares Plunge as Hindenburg Accuses Crypto Co of Fraud

Von | 27. März 2023

• Hindenburg Research has taken a short position in Block Inc, resulting in a 15% drop in share prices.
• Hindenburg is accusing Block of having numerous fake accounts and being involved in criminal activities.
• Block is exploring legal action against the short seller, while Wall Street maintains an overweight rating on its shares.

Hindenburg Takes Aim at Crypto Company

Hindenburg Research revealed a short position in financial technology company Block Inc, leading to a 15% drop in share prices on Thursday. The multinational conglomerate is accused of having numerous fake or duplicate accounts at its Cash App platform and being involved in criminal activities such as sex trafficking.

Block to Take Legal Action Against Hindenburg

In response, Block Inc reiterated that it’s a highly regulated public company and revealed plans of taking legal action against the short seller for their factually inaccurate and misleading report. Top executives, including CEO Jack Dorsey were also criticized for selling more than $1 billion worth of the company shares to benefit from the pandemic-driven rally.

Wall Street Disagrees With Hindenburg

Despite these accusations, Wall Street still seems to maintain an consensus overweight rating on „SQ“ with an average price target of $98 – up 60% from here. This suggests that investors are not convinced by Hindenburg’s research and have faith that the stock will continue to rise despite today’s decline.

Cathie Wood Grills Hindenburg

Following this news, Cathie Wood tweeted her disagreement with Hindenurg stating they were “wildly misleading investors” before going on to buy up more shares of Block Inc herself; serving as another vote of confidence for those looking to invest in the stock long-term.

LUNA Falls Sharply Following Arrest Allegation

However, LUNA was not so lucky as their stock fell sharply after Do Kwon was arrested under allegations made by US government authorities due to his involvement with cryptocurrency dark pool trading services.