Cathie Wood Tries To Salvage the Fallout From Block’s Embarrassingly Tepid Response to Hindenburg Research’s Attack

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In what might have made Victorian aristocrats proud given the sheer level of its inherent snobbery, Block’s (NYSE:SQ) response to the attack by the prolific short-seller Hindenburg Research has been equal parts dismissive and ambiguous, leaving ARK Invest’s Cathie Wood as the sole combatant on behalf of the stock’s bulls.

As we reported on Thursday, Hindenburg Research leveled troubling allegations against Jack Dorsey’s financial services and mobile payments company, Block (SQ). In what the stock’s bulls decried as a veritable litany of half-truths, Hindenburg Research asserted that the platform tries to squeeze money from its customers via predatory loans, high instant transfer fees, and a “Wild West” approach to compliance to artificially inflate its user base, thereby subjecting the platform’s users to an elevated risk of fraud and identity theft. The short-seller dedicated a hefty portion of its report to how Block’s Cash App was the “only” peer-to-peer e-payment service provider cited in an indictment related to COVID-relief cheques.

$SQ published a 5 sentence response to Hindenburg's report

Block's Response to Inaccurate Short Seller Report https://t.co/cHGUasv0iy

— Breakout Point (@BreakoutPoint) March 23, 2023

In response, Block issued a terse statement, merely rejecting Hindenburg Research’s allegations and vowing to pursue legal recourse against the short-seller. This statement was widely panned as tone-deaf and condescending. The company chose not to issue any specific rebuttal to Hindenburg’s allegations, assuming that its 5-liner statement would suffice.

And the result is