Block set for worst day in three years after Hindenburg short on shares
23/03/2023 18:34
(Updates)
** Shares of Block Inc SQ.N tumble 15.7% to $61.27,
setting stock on course for its worst day since March 2020
** SQ drops as much as 22.2% to $56.50 - hitting its
lowest level since early November
** Hindenburg Research says it holds short positions in the
Jack Dorsey-led payments firm
** Block has wildly overstated its genuine user counts and
has understated its customer acquisition costs, the short seller
alleges
** SQ says the short seller's report on its Cash App
business was "factually inaccurate and misleading" and it
intended to work with the U.S. Securities and Exchange
Commission to explore legal action
** "The initial reaction is overblown... a little late
to be shorting a stock that already collapsed last year," says
Thomas Hayes, chairman and managing member of Great Hill Capital
** SQ is the top trending stock on retail investor forum
Stocktwits.com; second-most traded stock on NYSE
** About 5.2% of Block's free float shares were in short
position as of March 22, according to Ortex data
** Nearly 117.4 mln shares of SQ traded so far, almost 9x
25-day moving average vols
** Peer PayPal Holdings PYPL.O falls 2.7%
** SQ has fallen 2.3% this year, following a 61% drop in
2022
(Reporting by Bansari Mayur Kamdar, Medha Singh and Shreyashi
Sanyal in Bengaluru)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter:
@BansariKamdar;))