Block INC (NYSE ticker symbol SQ)
A shareholder lawsuit alleged that Block founder and CEO Jack Dorsey and the company’s board of directors breached their fiduciary duties in agreeing to pay roughly $300 million to take control of Tidal as it was failing financially and the target of an ongoing criminal investigation.
A Delaware judge has dismissed, for procedural reasons, a shareholder lawsuit against Block Inc. over its 2021 acquisition of majority ownership in Tidal. <span;>It seemed, by all accounts, a terrible business decision,” the judge said of Block’s acquisition of Tidal.
Source: 19.may 2023 https://investorplace.com/author/louisresearch/
Block’s Bleak Forecast: Why Another SQ Stock Tumble Is Looming
The current valuation of the Cash App and Square parent’s shares may not fully reflect the impact of an economic downturn.
At risk of plunging yet again, consider it best to keep skipping out on SQ stock.
CLSA’s John Marrin. On May 11, downgraded SQ from “buy” to “underperform.
A worsening of the overall economic backdrop may just well be enough to push the stock back to multi-year lows (around $40 per share) before the stock truly bottoms out.
Source: https://hindenburgresearch.com Published on March 23, 2023
On Thursday March 30th, Block Inc. released a statement in an effort to address several of the issues we raised in our report released on March 23rd.
Rather than refute the key issues, Block’s response instead confirmed much of our analysis and avoided addressing the rest of it.
Block’s Response Confirmed It Has Reported Inflated User Counts to Investors For Years
Critically, Block’s response disclosed for the first time that the company has internal estimates of the number of users on the Cash App platform that differ widely from the number of “transacting actives” disclosed publicly to investors as its key user metric.
The cited 80 million annual user metric was inflated by 82%-105%.
Block’s newly reported internal estimates also show that its previously reported 51 million monthly transacting actives as of December 2022 represented a 16%-31% inflation of its actual estimated internal user counts.
Block’s latest disclosure makes clear that customer acquisition costs had been artificially lowered by inflation of the number of users on the platform. It also makes clear that claims of Cash App’s powerful network effects have similarly been overstated based on the same metric.
Block’s justification for its use of the flawed “transacting actives” user metric was that other competitors use even more misleading metrics, saying “some companies include any account that opens their mobile application or loads a webpage on a browser as an active account.”
The Company Didn’t Mention: An Estimate Of The Billions Of Dollars The Government, And Taxpayers, Lost Through Block’s Facilitation Of Fraud, Or Any Explanation For the Numerous Specific Compliance Gaps Detailed by Hindenburgh research: namely, Block facilitating an estimated billions of dollars in pandemic relief fraud. Those gaps included obvious lapses such as single accounts being permitted to accept unemployment payments on behalf of numerous individuals in different states.
Hindenburg research provided Extensive Evidence Showing The Opposite, Including That Block Paid To Promote A Song Called “Cash App” About Using The App To Pay For Murder. The evidence shows that Block paid to promote a song and video called “Cash App” . The song detailed how easy it was to use Cash App to pay hitmen to murder rival gang members.
Block Failed To Respond.