$Block(SQ)$  - a payments platform aimed at small & medium businesses.

It allows these businesses to accept credit card payments and use smartphone or tablet computers as payment registers for a point-of-sale system.

One of its products - Cash App is a mobile app that allows monetary transfers both among users and between users and businesses.

Subject : Exit / Sell your Block shares ?

While details to the report is gradually being released to the press, the needful thing to do at the moment is to (seriously consider) exit from it first - assuming its still profitable.

Why ?

This is because Hindenburg Research LLC is an investment research firm with a focus on activist short-selling has just released a scathing report on Block.

It has accused the Jack Dorsey run company of the followings:

BLOCK’s flagship Cash App facilitates crime

Lacks strong compliance controls.

Where Is The Proof ?

Based on the Hindenburg Report

Their conclusion was based on 2 years of investigative work at the ground level.

It accused Block’s Cash App thrived on serving “unbanked” customers.

By “unbanked” it refers to customers that were involved in criminal or illicit activity.

the Hindenburg Report also reported that former employees estimated that:

40%-75% of accounts they reviewed were fake or involved in fraud or

Multiple accounts were tied to a single individual.

I will be interested to know what will mr elon musk’s reaction be when this piece of news reaches his ears ? Will he insert a poo emoji in his Tweet ? LOL.

Afterall both he and Jack Dorsey had an overlapping appointment. Jack was the former CEO of Twitter.

Mr musk is the current CEO of Twitter; despite polls wanted him to step down.

I am unsure how credible The Hindenburg Research company is.

However, there is no denying of the damages it is able to wield.

Just last month (Feb 2023), the Hindenburg Report had gone after Indian conglomerate The Adani Group.

After releasing a report accusing the Adani group of of stock manipulation and accounting fraud, the Adani companies is still being sold off on eroded sentiment.

Adani’s battle with the Hindenburg Report, has put the group’s exposure to Wall Street — amounting to nearly $9 Billion under the spotlight, according to JPMorgan.

There is this saying in Wall Street - Buy the rumours, Sell the news.

Now that the news on Block is out, is it time to sell ?

Block’s Latest Stock Price : as of 10:10pm singapore time

It has lost -21.69% to date.

Do you think what the Hindenburg Report is factually accurate ?

Do you think it is wise to follow the “buy the rumour, sell the news” mantra ?

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