After the Hindenburg takedown of Block, Jack Dorsey's wealth falls by $526M

After seller Hindenburg Research charged Twitter co-founder Jack Dorsey's mobile payments business Block with breaking banking regulations and assisting customers in taking advantage of COVID stimulus payments, Dorsey's net worth was reduced by more than $500 million.

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According to Trade Algo, Dorsey's net worth was $4.4 billion, down $526 million or 11% from the day before.

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Trade Algo reports pegs Dorsey's ownership interest in Block at $3 billion, which accounts for the majority of his wealth.

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Moreover, Dorsey has stock in Twitter, a microblogging platform that he helped create in 2006. Elon Musk, the owner of Tesla, recently purchased Twitter for $44 billion.

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In exchange for selling Twitter to Musk, Dorsey was given a $978 million retirement package.

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As of right now, Dorsey owns a $388 million stake in Twitter, which Musk made private.

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Following the devastating analysis by Hindenburg Research on his contactless banking business Block, Jack Dorsey's net worth has fallen by almost $526 million.

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By the end of Thursday's Wall Street trading session, shares of Block, the parent company of well-known payments processor Cash App and its vendor services provider Square, decreased by 15%.

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As Hindenburg Research, which has targeted individuals like Indian billionaire port operator Gautam Adani and hydrocarbon truck startup Nikola, published a damning study alleging that Block turned a blind eye to widespread fraud, investors dumped off the company's stock.

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In a statement issued on Thursday, Block refuted the accusations and vowed to sue Hindenburg.

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The business referred to the article as "factually false and deceptive," and it declared it would consider legal action against Hindenburg in cooperation with the Securities and Exchange Commission.

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During a two-year study, Hindenburg claimed to have discovered that Block had exaggerated the total number of registered users of its products.

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The short seller gave as evidence "hundreds of interviews with former workers, partners, and industry professionals, detailed analysis of regulatory & litigation data, and public information requests and the Freedom of Information Act."

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By repotting "misleading...metrics replete with false and duplicate accounts," according to Hindenburg, Block "obfuscates" the actual number of users utilizing CashApp.

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Adani, who was once the second-richest individual on earth, was the subject of a report by Hindenburg, which led to a significant sell-off of his company's stock.

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Adani's net worth as of Friday was estimated to be $60.1 billion, a significant decrease from the $150 billion wealth that was associated with his name this one past September.

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2020 saw Hindenburg short Nikola stock after charging the maker of green-powered trucks with fraud.

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The short seller charged Trevor Milton, the founder of Nikola, with making misleading claims about having exclusive technology to work with major automakers.

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In 2020, the company's stock was trading at $66 per share. Now, it is worth $1.36.

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