Notorious short-selling firm Hindenburg Research has Square parent company Block Inc. in its crosshairs, accusing the company of fraud, predatory practices, and inflating user counts in a report released Thursday morning.

“In sum, we think Block has misled investors on key metrics, and embraced predatory offerings and compliance worst-practices in order to fuel growth and profit from facilitation of fraud against consumers and the government,” the firm wrote in its report.

As a disclaimer on the report, Hindenburg noted that it’s taken a short position in shares of Block, formerly Square, Inc.

After the report was released early Thursday morning, Block shares plunged as much as 17% in pre-market trading from their previous close of $72.65. The company trades on the NYSE under the SQ ticker. Things got worse when markets opened, with shares falling below $58, the lowest they’ve been since the start of the year, before rebounding to around $63 at the time of writing. It’s down nearly 13% today.

Block issued a statement early Thursday afternoon, saying that it will work with the United States Securities and Exchange Commission (SEC) and potentially pursue legal action against the firm for what it describes as a “factually inaccurate and misleading report.”

“Hindenburg is known for these types of attacks, which are designed solely to allow short sellers to profit from a declined stock price,” Block’s statement reads. “We have reviewed the full report in the context of our own data and believe it’s designed to deceive and confuse in

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Author: Stacy Elliott

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