Payments firm Block's Australian shares slump after Hindenburg report
Refiles to correct typographical error in paragraph 6
By Navya Mittal
March 24 (Reuters) -Australia-listed shares of Block Inc SQ2.AX, led by Twitter co-founder Jack Dorsey, plunged as much as 20% on Friday after Hindenburg Research alleged the payments firm overstated its user numbers and understated its customer acquisition costs.
Block said the report was "factually inaccurate and misleading" and that it was exploring legal action against the short-seller.
Shares of the San Francisco-headquartered company, which has a secondary listing in Australia, led losses in the country's benchmark ASX 200 Index .AXJO. They hit their lowest since November 2022 at A$86.30 before edging up slightly to $88.31.
Australia's corporate watchdog, the Securities and Investment Commission, declined to comment. A source not authorised to speak with media said the matter was for U.S. regulators. The Australian Stock Exchange noted Block's primary listing was in the U.S. and declined to comment further.
Block's U.S. shares SQ.N fell 15% on Thursday.
Hindenburg's report, which was behind a market rout of more than $100 billion in India's Adani Group earlier this year, said it found former Block employees estimated 40% to 75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual.
The move is seen as a challenge to Dorsey, who co-founded Block in 2009 in his San Francisco apartment with a goal to shake up the credit card industry. He is the company's largest shareholder with a stake of around 8%.
Investors have been in a "sell first, ask questions later" mode since the U.S. banking crisis "so this seems to be a well-timed attack by Hindenburg which puts Block on the chopping block," said Matt Simpson, senior market analyst at City Index.
Block's $29 billion buyout of the Australian buy-now-pay-later firm Afterpay "was designed in a way that avoided responsible lending rules in its native Australia," the U.S. short-seller said in its report.
"Hindenburg's attack on Block will be very closely watched by both regulators and investors, given the current banking turmoil has severely disrupted market sentiment," said Glenn Yin, head of research and analysis, AETOS Capital Group
Markets will take time to digest the claims made under the short-seller's two-year investigation, Yin added.
Block Shares Tumblehttps://tmsnrt.rs/40O8gGn
Reporting by Navya Mittal in Bengaluru and Lewis Jackson in Sydney; Editing by Devika Syamnath, Sherry Jacob-Phillips and Lincoln Feast.
Activos relacionados
Últimas noticias
Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.
Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.
Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.
