After a scathing report on billionaire Gautam Adani’s empire in January, which led to a stock rout in all 10 Adani-related companies, Hindenburg Research’s latest target is former Twitter CEO Jack Dorsey’s digital payments company Block. The new report alleges that it found that Block’s Cash App was likely facilitating fraudsters taking advantage of government stimulus programmes during the pandemic. Block Inc. shares tumbled 20% to $58.31 at 9:46 am in New York, the company’s biggest intraday decline in three years, after Hindenburg Research said it’s betting on a decline in the stock.
Also read: Block shares slump 20% after Hindenburg shorts Jack Dorsey’s payments firm
Amid the latest bombshell, which the company claims was published after a two-year investigation, a look at the Dorsey-led financial firm:
- Previously known as Square, the firm was launched in 2009 as a credit card reader for vendors and customers that could be plugged into mobile phones. It also allowed tablet computers as a point-of-sale system to make payments.
2. Square Cash was launched as a competitor to mobile service payment company Venmo in 2013. It was later renamed as Cash App which customers could use to transfer funds. Square expanded further to offer short-term loans in 2014. In 2017, Square introduced Cash Card – a prepaid debit card that can be used outside the virtual wallet.
3. In 2018, Cash App allowed users to trade Bitcoin on the platform. The following year, the company added the feature of free stock trading.
4. After acquiring Australia’s Afterpay in 2021 for $30 billion, the company added Buy Now, Pay Later option. In December the same year, Square was rebranded as Block to reflect the financial service company’s broader cryptocurrency and blockchain aspirations.
5. In 2022, Dorsey renounced the CEO title opting for the name ‘Block Head’ instead. However, the role entails the same responsibilities. The company laws also removed the CEO and president position. As per a CNBC report, Block fell over 45% in 2022 amid spike in interest rates.
(With inputs from Bloomberg)
