Shares of Jack Dorsey’s Block plunged over 18% after short-seller Hindenburg Research announced the payment company was its latest short position.
“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 its report. The research firm said that Block’s Cash App thrived on serving “unbanked” customers.
The report alleges those unbanked customers were involved in criminal or illicit activity.
“Former employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual,” the report said.
Representatives for Block did not immediately respond to a request for comment.
-via CNBC.com
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