Jack Dorsey
Jack Dorsey, a co-founder of Block Inc., has lost more than $500 million in wealth as a result of Hindenburg Research, an investment research firm, and short-seller, accusing the business of exaggerating the number of users on its Cash App platform while understating the costs associated with acquiring new users.
Block’s shares fell 15% as a result of this report, wiping out all of the gains gained this year to that point. Dorsey’s net worth has decreased by 11% and is currently $4.4 billion. Block’s Cash App, a peer-to-peer mobile payment platform that enables users to transfer, receive, and invest money instantly, is the primary subject of Hindenburg’s article.
According to Hindenburg, she spoke with former Block workers who claimed that between 40 and 70 percent of the Cash App accounts they examined were fraudulent, phony, or additional accounts connected to a single person. The website, according to the short seller, has been used to assist illegal operations like sex trafficking and fraud.
To allay concerns, Block must explain to investors how many distinct users of Cash App there are and offer projections of user numbers. Users must be reassured that harsh action will be taken against fraudulent behavior and unlawful transactions on the platform. Block must act quickly to repair its tarnished reputation if it wants to win back the confidence of users and investors.
In findings, severe accusations of stock manipulation and fraud against Block Inc. have caused a sharp decline in co-founder Jack Dorsey’s wealth.
