After Adani, Hindenburg Now Shorts Jack Dorsey's Payments Firm Block Inc

Hindenburg Research said on Thursday it held short positions in Block Inc, alleging that the payments firm overstated its user counts and understated its customer acquisition costs. Block, Inc. (SQ), founded by entrepreneur Jack Dorsey, is a Silicon Valley company offering payment and mobile banking services for merchants and consumers.

"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. Short-selling is a mechanism where you sell shares or an instrument before on hopes that it would fall and profit from falling prices. When prices fall, you cover your sell positions, and profit from buying at lower levels.

According to Bloomberg reports, Block Inc declined 20% to $58.35 at 8:53 a.m. in New York in US premarket trading.

On January 24th, Hindenburg released a report outlining numerous issues of suspected fraud at the Adani Group, the 2nd largest conglomerate in India run by the world's then-third richest man. Since then, there has been a severe price destruction in the stock of Adani group companies.

Adani claimed that Hindenburg have committed a "flagrant breach of applicable securities and foreign exchange laws."

According to Hindenburg, Adani group predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative, claiming our report amounted to a "calculated attack on India." "In short, the Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself," Hindenburg had said.