While many tech stocks have continued to rise this year, Block (SQ) stock had its worst week in over three years after short-seller Hindenburg Research questioned its business operations.
Block (SQ) shares are under pressure after falling 15% on Thursday, as investors continue to digest Hindenburg's latest short-seller report that targeted the company. The report accused Block of misleading investors by overstating user numbers and says it's been ignoring fraudulent payments. While the report offers details of alleged wrongdoings by Block, some Wall Street analysts are not buying into it. "There were a lot of undertones in that Hindenburg report which I didn't like, and I thought were inappropriate as well," Dan Dolev, Mizuho Senior Financial Technology Analyst, told Yahoo Finance. Dolev points out that there are likely similar things going on in payments apps Zelle and Venmo (PYPL). "To a certain extent, these things happen everywhere." The stats that Hindenburg used to back up its accusations actually show the company has a "good hit rate" Dolev says. "I don't think this is actually a valid argument. ...The numbers speak for themselves." You can watch Yahoo Finance's Brad Smith and Jared Blikre's entire interview with Dolev here. Key Video Moments 00:00:01: Hindenburg 'singled out' the Cash app 00:00:33: 'Inappropriate' findings in the report 00:00:52: Block's 'hit rate' around fraudulent activity 00:01:25: Block's gross profit
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