Block's Response to Inaccurate Short Seller Report
investors.block.xyz
investors.block.xyz
We are a highly regulated public company with regular disclosures, and are confident in our products, reporting, compliance programs, and controls. We will not be distracted by typical short seller tactics."
Wow... they're not even denying anything. It reads like, "What we did is technically all legal".
Stay quiet for too long and folks will assume the article is right since you haven't responded. Respond too fast and your analysis will likely not stand up to scrutiny because it was set up too soon. It makes sense that they put out a first statement here - it remains to be seen if they will follow it up with a more detailed pushback.
I think Hindenburg has a pretty solid reputation at this point. So what they should do is refute their points one by one with data. It will take effort and weeks of work, but failing that people will assume it’s because they can’t refute those points.
I literally put my money against them this morning by opening a small short position. So far, I feel happy with that decision.
What’s the track record Hindenburg being right about these calls[1]?
Going off memory, there’s been quite a few in the news that had some meat behind them like the recent one with Adani.
[1]: Or should I say puts?
The ones I remember were SimleDirectClub, Nikola, Lordstown Motors, Clover Health, and most recently Adani.
I know for a fact all of these companies are trading +90% down from their reports, except for Adani which I think is only down ~50%.
They definitely aren't just throwing claims out there. If they call you out, you future aint looking green.
It's an odd response from Block given Hindenburg's solid track record. I expected them to try and refute some of the claims but they didn't even try it seems
They use flowery language, but it's very rare the facts they present are outright wrong
1) give at least one or two reasons why the report is wrong
2) give exactly zero reasons, and then "explore legal actions" against the ones who broke the story.
If your CEO was the same person who ran an ardently free speech platform, you might go with #1 just as a matter of culture.
But some things, I guess, override that? But none of them seem very good and range from "They caught us! Let's slow them down." to "Don't bother Dorsey with this one, just write a response with Chat-GPT and hope it all blows over."
Enron
If this happened to Stripe, do you think that Stripe couldn't publish information about their AML compliance process and show in a legally-liable way that they're on the up-and-up? Having worked there, I feel very confident that they could, and that they care enough about their customers that they would.
This is really on the precipice of collapse type fraud. When money is easy and fomo is high, these companies get to ride the wave.
TBH, they're limited in what they can talk about. Publicizing details about AML processes (e.g. about specific patterns of behavior that the company associates with fraud) is likely to make them less effective.
oh well.