Why Block Shares Sank 20% This Week
Shares of Block (NYSE: SQ) were down by as much as 20% this week, according to data from S&P Global Market Intelligence. Short-selling group Hindenburg Research released a report alleging that the company is being negligent in its oversight to prevent criminal activity on the Cash App, that it is skirting regulatory requirements for large financial institutions, and that loan quality at its "buy now, pay later" (BNPL) subsidiary Afterpay is deteriorating. Block responded to the report saying it had no merit.
As of 12:38 p.m. ET on Friday, the stock was down 18.8% this week and 79% off its all-time high.
Hindenburg Research is one of the highest-profile short-sellers on Wall Street. This is the team that uncovered the fraud going on at Nikola Motors and that recently went after Indian billionaire Gautam Adani. Investors pay attention to Hindenburg -- and for good reason -- as it has a strong recent track record of uncovering shady and fraudulent actors.
Source Fool.com
