The co-founder of Block Inc., Jack Dorsey, saw a significant decrease in his net worth following allegations made by Hindenburg Research. The research firm claimed that the payments company neglected widespread fraud. It caused Dorsey’s fortune to plummet by $526 million on Thursday – the worst single-day decline since May.
As a result, his net worth now stands at $4.4 billion after the 11% drop, according to the Bloomberg Billionaires Index.
Allegations of inflated user metrics were made against Block Inc. by Hindenburg in their latest report, indicating that the company’s stock has a downside of 65% to 75% “on a purely fundamental basis.”
However, Block denied the accusations and said they plan to pursue legal action against the short-seller. Despite this, Block’s stock fell by 15% at the end of the day, having dropped by 22%.
Dorsey’s fortune is primarily tied up in Block, with the Bloomberg wealth index estimating his stake in the company to be worth $3 billion.
His position in Elon Musk’s social media giant, Twitter, is valued at $388 million. The Hindenburg report is not the first time the firm has singled out billionaires like Jack Dorsey, causing their fortunes to decline.
Earlier this year, the firm’s investigation into India’s Gautam Adani and his empire caused Adani’s companies’ stocks to plummet, erasing tens of billions of dollars from his net worth.
As a result, Adani now ranks 21st on Bloomberg’s wealth index, with a fortune of $60.1 billion, having previously been the world’s second-richest person.
In September 2020, Hindenburg also targeted electric carmaker Nikola Corp., which resulted in the company’s stock price plunging. An investigation followed, leading to a fraud conviction against its founder, Trevor Milton, in October of the same year.
In conclusion, the accusations made by Hindenburg Research against Block Inc. have resulted in a significant drop in Jack Dorsey’s net worth.
The company denies the allegations and plans to pursue legal action against Hindenburg. The firm has targeted billionaires before, with Gautam Adani and Trevor Milton also experiencing declines in their net worth following Hindenburg’s investigations.
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