On Thursday, Hindenburg Research announced that it had short positions in Block Inc., claiming that the payments company had exaggerated its user counts while understating the costs associated with acquiring new customers. Silicon Valley-based Block, Inc. (SQ), founded by businessman Jack Dorsey, provides payment and mobile banking services for retailers and customers.
“Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping,” According to a letter posted on its website, the short seller.Short-selling is a strategy where you sell shares or another instrument in anticipation of a price decline so you can profit from the decline. You cover your sell positions when prices drop and make money by acquiring goods at lower prices.
Block Inc reportedly dropped 20% to $58.35 at 8:53 a.m. in New York during US premarket trading, according to Bloomberg.
The Adani Group, the second-largest conglomerate in India and the third-richest man in the world at the time, was the subject of a report from Hindenburg published on January 24 that detailed multiple allegations of fraud at the company. The shares of the Adani group enterprises has had a significant price damage since that time.
Adani claimed that Hindenburg have committed a “flagrant breach of applicable securities and foreign exchange laws.”
Hindenburg claims that the Adani group attempted to shift the focus away from important problems and into a nationalist narrative by asserting that our research amounted to a “calculated attack on India.” With regard to the Adani Group, Hindenburg had stated, “In short, the Adani Group has attempted to equate its rapid rise and the fortune of its Chairman, Gautam Adani, with the success of India itself.”