Thursday, Hindenburg released a report saying that Block did lie about how many users it had and that the stock has a 65% to 75% downside.
The latest report from Hindenburg Research said that the payments company ignored widespread fraud. This damaged the net worth of Block Inc. co-founder Jack Dorsey.
Dorsey’s wealth fell by $526 million on Thursday, which was the biggest drop in a single day since May. Based on the Bloomberg Billionaires Index, after the 11% drop, he is now worth $4.4 billion.
Hindenburg released a report on Thursday saying that Block had lied about how many users it had and that the stock has a “purely fundamental” downside of 65% to 75%. The company denied the claims and said it would look into taking legal action against the short-seller.
On Thursday, Block dropped as much as 22% before ending the day down 15%.
Dorsey, who also helped start Twitter, has put most of his money into Block. According to the Bloomberg wealth index, his share of the company is worth $3 billion, and his share of Elon Musk’s social media company is worth $388 million.
It’s not the first time Nathan Anderson’s Hindenburg has targeted billionaires and caused their wealth to fall.
Early this year, the company released a report about Gautam Adani and his business empire. This caused the stocks of his companies to drop, which took tens of billions of dollars off of his net worth.
Adani was once the second-richest person in the world. Now, he is 21st on Bloomberg’s wealth index with a fortune of $60,1 billion.
Hindenburg also wanted to get Nikola Corp., which makes electric cars, in September 2020. After that, Nikola’s stock dropped, and an investigation led to its founder, Trevor Milton, being found to be fraudulent in October.