Hindenburg Research on Thursday disclosed short positions in Block Inc (formerly Square Inc) and alleged that the payments firm led by Twitter co-founder Jack Dorsey overstated its user numbers and understated its customer acquisition costs. Hindenburg Research also alleged that Block Inc’s finance chief Amrita Ahuja dumped millions of dollars in stock.
Who is Amrita Ahuja?
> According to her Linkedin profile, she has been with Block Inc for the last four years and three months. She is the current chief operating officer of the company.
> Amrita Ahuja is the daughter of Indian immigrants who owned a day-care centre in a suburb of Cleveland, according to a Wall Street Journal (WSJ) report.
> Amrita Ahuja said she was drawn to Square because of its focus on empowering small-business owners like her parents.
> Previously, she has worked as strategy and finance roles at Walt Disney Co., News Corp’s former Fox division, and Activision Blizzard Inc. (News Corp owns The Wall Street Journal.)
> At Fox, she played a role in launching the streaming service Hulu. At Activision Blizzard, maker of “Call of Duty,” “Candy Crush” and “World of Warcraft,” she helped the videogame company transition its business model from one dominated by in-store sales around the holidays to one defined by an online, always-on, multiplayer experience, WSJ reported.
> During Amrita Ahuja’s time at Square, the company has helped small-business customers build online storefronts to make up for the shortfall in foot traffic caused by the coronavirus pandemic.
Hindenburg Research’s allegations
The US short-seller, which was behind a market rout of more than $100 billion in Adani Group, said in its report that former Block employees estimated that 40% to 75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual.
Shares of Block slid 20% to $58.39 in morning trading following the report. If losses hold through the session, the stock could record its steepest percentage fall since March 2020.
The move is seen as a challenge to Dorsey, who co-founded Block in 2009 in his San Francisco apartment with the goal to shake up the credit card industry, and is the company’s largest shareholder with a stake of around 8%.
(With inputs from Reuters)
