• Hindenburg Research has revealed to have taken a short position in the financial technology company Block Inc.
• Hindenburg’s research claims that many of Block’s accounts are involved in criminal activities, such as sex trafficking.
• In response, Block Inc stated their intention to take legal action against the short seller.
Hindenburg Researches Takes Short Position on Block Inc.
Block Inc shares were down 15% on Thursday after Hindenburg Research revealed they had taken a short position in the financial technology company. The research spanned two years and alleges many of the company’s accounts are involved in criminal activity, including sex trafficking.
Wall Street Weighs In On Block Shares
Wall Street seems to disagree with Hindenburg as well, maintaining an consensus overweight rating for „SQ“ with an average price target of $98 – up 60% from its current value.
Block Responds To Allegations
In response, Block Inc reiterated that it is a highly regulated public company and stated their intention to take legal action against the short seller. They also mentioned plans to work with the SEC regarding these allegations.
Block CEO Jack Dorsey Selling Shares
Hindenurg also took issue with the fact that top executives, including CEO Jack Dorsey had sold more than $1 billion worth of company shares to benefit from pandemic-driven rallys.
Conclusion
Despite Hindenburg’s report and share prices being slightly down for the year, Wall Street still maintains faith in Block’s future prospects as evidenced by their consensus rating and price target on “SQ” stock. It remains to be seen if these allegations will hold up legally or if any changes will come about due to this news but either way investors should keep an eye out for further developments in this situation.